While many consumers may be feeling the squeeze during this difficult economic period, Money Facts has warned that they may find their finances constricted further as lenders batten down the hatches.

According to the group, there has been a sharp increase in the proportion of credit card and personal loan providers who require that their borrowers have an annual income in excess of 18,000 pounds. This, the independent financial advice site reports, could result in a severe credit drought that could put the heat on thousands of Brits. Research from the firm showed that nearly half (48 per cent) of credit card lenders require that borrowers have more than 18,000 pounds coming in over the course of the year, up from less than a third (31 per cent) six months ago.

So too, personal loan providers are limiting access to credit, with three-quarters (75 per cent) requiring a minimum income, compared to 68 per cent half a year ago. And with unemployment rising steadily and analysts warning that as many as three million people could be out of work within a year, Money Facts has warned that limiting access to credit could leave peoples finances in dire straits during this difficult period.

For those who have found themselves struggling to get approval from lenders, taking out a secured bad credit loan may be an effective way to repair damage done by missed payments and high personal debt levels.

Meanwhile, Sean Gardner, director of MoneyExpert, warned that lenders are becoming increasingly averse to extending loans and credit to those with a bad track record for repayment.

“Lenders are putting more and more barriers in the way of borrowers as they attempt to keep bad debts under control. Providers of loans and credit cards now not only require good credit histories but increasingly are looking for evidence of a steady income stream and borrowers need to prove they are in work. While its certainly a good thing that those in financial difficulty avoid digging themselves deeper into debt, the recent rise in unemployment figures, represents a worrying possibility of many being unable to get access to credit when they need it most,” he said.

And for those who are on the hunt for a new credit card or personal loan, research from Money Facts has shown that the chances of getting approval could change substantially from one bank to another. It noted that while Barclays requires its credit card borrowers to bring in at least 3,000 pounds a year, Citibank and Coutts only extend credit to those earning in excess of 100,000 pounds a year.

Consumers who are keen to make a clean start after a period of missed repayments may find that taking out a bad credit loan is an effective way to begin scrubbing blemishes off their credit record. Britons who do choose to apply for such a loan may wish to take the advice of the Motley Fool, which earlier this year warned that it is vital that those who have made financial mistakes in the past learn their lessons.

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