It's funny and a bit ironic to think that to improve your credit rating, you actually need to take out some new credit in the first place. The principle behind this is relatively simple; if you've missed payments or defaulted on loan sums in the past then lenders will look at your credit profile and may be unable to trust that you can repay finance. To get around this the consumer generally needs to take out some new credit and make the repayments on the loan to prove to lenders that they are able to repay finance, therefore increasing their trust rating.So what's the problem here? You may say, it's easy to repair my credit then; just take out a new loan or credit card, make payments on time and bob's your uncle, your credit rating is restored! Wahey! Unfortunately however, it's not that simple. If you've damaged your credit rating in the past, you may find it impossible to get any new credit in the current economic times and therefore you may be unable to ‘prove' that you can now repay anything you borrow. So what's the solution here?Guarantor loans have been around for quite a while, but there's a new type of unsecured personal guarantor loan that offers fixed term lending at competitive rates of interest. This means that people who have a bad credit history can now get hold of credit by using a guarantor to support their application. The premise is simple; you as the applicant can apply for a guarantor loan as you would normally apply for an unsecured loan. You then just need to provide a guarantor (usually a homeowner) to back or support your application so that the lender has confidence they can reclaim their money.The applicant's current credit rating doesn't normally affect whether they can get a loan or not, because the lender will use the credit rating of the guarantor to effectively guarantee the loan on the applicant's behalf. The applicant can then get the finance and make the loan repayments. Making the loan repayments in turn builds up the applicant's credit rating once again and then, once the loan is paid off the applicant should be in a position to apply for normal unsecured credit once again.