It isn’t usually a good idea to borrow money to pay debts, and you should always check what your other options are first. If you do decide to borrow you should:

  • look for the cheapest type of borrowing
  • avoid store cards, pay-day loans, door-to-door lending and illegal lenders
  • remember that if you don’t keep up repayments, your home or other goods will be at risk.

Many lenders use your credit score to assess how likely you are to keep up with repayments. Your credit score doesn’t depend on your health. But illness may affect your credit score indirectly, for example if it means you’ve stopped work, borrowed a lot or if your income is reduced. If your lender decides you are high risk, they may not lend to you. Your lender might also check your credit file while assessing your credit score.

Types of borrowing include:

  • family and friends
  • bond committees
  • credit unions
  • mortgages/secured loan
  • credit card
  • overdraft.

Our financial team on 0808 808 00 00 can give you free guidance about borrowing.

If you’re thinking about borrowing money

Before you consider borrowing money, you should:

If you have debts

Borrowing to deal with existing debts you can’t pay back is not usually a good idea. Talk to a trained debt adviser first about options for dealing with your debts or credit commitments. You can speak to one by calling StepChange Debt Charity.

Paying back the money

Whenever you borrow money, you should try to have a clear idea of how you will pay it back. You could use our online budget calculator to help you do this.

Types of borrowing

There are lot of ways to borrow money. These include:

  • friends and family
  • local community schemes
  • credit unions
  • credit cards and store cards
  • secured or unsecured personal loans
  • store cards
  • payday loans.

The best type of borrowing for you will depend on your personal situation. It also depends on your credit score.

For more in-depth guidance about borrowing, contact StepChange Debt Charity or Citizens Advice.

Borrowing tips

  • Check what other options you have before borrowing.
  • If you do decide you need to borrow, look for cheap ways to do it.
  • Try not to use store cards, payday loans, door-to-door lending or unauthorised overdrafts. The costs can be very high for these types of borrowing.
  • Remember that if you don’t keep up payments on a secured loan, your home (or other goods, such as a car) will be at risk.
  • Avoid illegal lenders (loan sharks). They charge excessive fees and may use aggressive tactics if you cannot repay the money.

You can report illegal lenders to government Illegal Money Lending Teams on:

  • 0300 555 2222 in England
  • 0800 074 0878 in Scotland
  • 0300 123 3311 in Wales. 

In Northern Ireland, call the Trading Standards consumer line on 0300 123 6262.

Your credit score

Your credit score is a rating of how reliable you might be when paying money back. Many lenders will use credit scoring to estimate how likely you are to keep up with repayments.

Your credit score doesn’t depend directly on your health. But your credit score may be lower if:

  • health problems mean you have had to stop work
  • your income is reduced
  • you have already borrowed a lot of money.

Your credit score depends on several different things, including: 

  • how well you have kept up with credit agreements in the past
  • how long you have lived in your current home
  • whether you own your home
  • whether you are employed
  • how long you have been in your current job
  • your marital status
  • your income
  • whether you have a bank account and existing loans
  • whether you pay bills on time – for example your mobile phone bill.

If you have a low credit score and the lender decides you are high-risk, they may refuse to lend to you. Or they might charge you a higher than average interest rate. 

Loans are not credit scored if they are:

This means you may qualify for these if your income is low and you are claiming certain state benefits.

Credit referencing 

When looking at your credit score, a lender may check the data held about you at the three main UK credit reference agencies. They are:

The data held about you is called your credit file.

These agencies hold publicly available information about you. This may include your name and address from the electoral register, and private information about how you have handled loans and credit in the past.

When you apply to borrow money, you can ask the lender whether they have used a credit reference agency when assessing your application. If they have, you can ask which one. You can contact the credit reference agencies at any time and ask to see your file. This will cost you £2. Checking your file lets you see if there are any errors. You can also check your credit score online, on sites such as Noddle (run by Callcredit) and Clearscore.

If you do find any mistakes, the credit reference agency will tell you how to correct them. It is likely that all three credit reference agencies hold a file about you. The information they have may be different, depending on which financial organisations they get information from.

Back to Planning and managing your finances


Reviewing your savings, investments and income will help you plan your budget.


If you are struggling to cover your essential costs, call us on 0808 808 00 00. You may be eligible for financial help.


Having a weekly or monthly budget can help you manage your day-to-day finances.

Managing payments

It is important to keep track of your bills and bank accounts. There are ways to make managing them easier.

Sorting out your affairs

Planning for the future could include writing a will and deciding what will happen to your possessions.

Inheritance Tax

Inheritance Tax is paid if your estate is worth more than £325,000 after your death. This includes property, money and possessions.