Credit products
Clients on benefits or a very low income tend to use credit products to cover day-to-day expenses. They potentially face the highest risk of detriment. They might think they cannot access mainstream forms of lending and mainly focus on the affordability of repayments, which are usually low weekly amounts.
Common credit options are listed below.
•Home credit: often seen as friendly, flexible and non-judgemental. There are fewer home credit companies on the market now, but interest is usually very high.
•Catalogues: used mostly for white goods (eg, fridges and washing machines) and clothing. Clients might not consider this to be borrowing.
•Rent-to-own: often used because the borrower believes they are more likely to be approved (usually for white goods). Numerous firms operate in the UK, predominantly on Facebook and other social media. You can check the Financial Conduct Authority register at to see if they are authorised.
•Unlicensed lender: also known as a ‘loan shark’, this type of lender will often take advantage of familiarity and vulnerabilities to maintain their position. The Scottish Illegal Money Lending Unit provides information and support at or telephone 0800 074 0878.
•Credit unions: clients are often referred to these by support services, as approval is likely even to those with poor credit scores and clients will often be able to save while repaying their loan. This can be an expensive way to borrow, as interest rates are often higher than for high street banks, although they can be considerably lower than for other types of credit products.