Who could be my guarantor?

Posted byadmin | Category useful information | Date 22 December 2014

A crucial part to a guarantor loan is selecting a good guarantor to increase your chances of the loan being improved. From the lenders point of view, have a good quality guarantor with a good credit rating adds huge credibility to your application. Even if you have bad credit and have been turned down by banks and other lenders, you can still borrow up to £7,500 based on having a good person as your guarantor. In this article, we explain who is an ideal guarantor and what lenders look for.

Family member, friend or colleague

Your guarantor could be any family member, friend or colleague that is close to you. The guarantor could be your spouse provided that you have separate bank accounts and the one used for the application is not a joint account. They must be fully aware of the loan you are applying for and the role they play if you are unable to meet repayment. Your guarantor must therefore have an insight into your finances and understand the risk involved.


It is worth having a good conversation with the person who you wish to be your guarantor. You should have their full consent before applying for a loan. The guarantor must be aware that if the borrower fails to repay the loan on time, they are responsible to cover the cost of the loan. Therefore, they need to have the repayment amount available each month and if they too cannot meet repayments, they must consider that there may be further charges involved and their credit rating may be affected.

Someone who wants to help you build up your credit rating

The person you use as the guarantor can also be a nice person you know who wants to help you rebuild your credit score and help you get back on your feet. By repaying the guarantor loan on time will benefit your credit score because it shows that you have kept to a repayment schedule and paid on time. The guarantor may be able to lend you the money anyway but through a guarantor loan, they can provide some security for you to rebuild your credit rating for future benefit. Having a better credit score will allow the individual to access other forms of credit and finance in the future more easily and at better rates of interest.

Someone with good credit

Something that is likely to improve the likelihood of you receiving a loan is having a guarantor with good credit. This tells the lender that even if you cannot repay your loan, the guarantor has a very good history of paying other loans and should easily be able to cover the cost. The philosophy behind this is if the person with good credit trusts you, then the lender believes that they can trust you too.

Homeowners are particularly good guarantors to have because they must have demonstrated a good credit rating in order to get a mortgage and they are unlikely to leave the country if they have a property. Being the owner of a car is also a strong indicator because it shows someone who is used to paying monthly instalments which reflects the nature of a guarantor loan.

Who is not a good guarantor to have

Guarantors who are not likely to help get your loan approved including those with bad credit. The lender will not want to have someone with bad credit as the guarantor because they be unlikely to cover the repayment. This means that someone who is bankrupt or has a CCJ or IVA is not going to qualify as your guarantor.

Someone who lives abroad or has lived in the UK for less than 3 years is unlikely to be seen as a good guarantor in the lender’s eyes. This is because the person may be hard to contact and recover funds for in the event of missed repayment.

A fake applicant will not be approved by the lender because they will always run credit checks to understand the creditworthiness of the guarantor.

For a full explanation of what we have discussed here, please enjoy this video below: