A financial expert has advised consumers with a bad credit rating to think carefully before taking out an unsecured loan.

The =hHead of personal finance at Motley Fool said that people should look at their own lifestyle before they decided if an unsecured loan was suitable for them.

People should ask themselves why they had a bad credit rating in the first place, he explained.

The firm wanted to drive home the idea that when people wanted to borrow money, they should asked themselves whether they really needed to, they said.

People needed to look at their budget and ask themselves if they could go without another packet of cigarettes or a pint of beer, he advised.

However, he added that he understood that people might need to take out a loan if something unfortunate happened in their life – for example if they lost their job.

Research from credit reference agency CallCredit revealed that 20 county court judgements (CCJs) were recorded for every 1,000 people aged over 18 in England and Wales between May 2006 and May 2005.

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