Times have been hard and if the latest news reports are anything to go by, they may not be about to improve any time soon. Although there is light at the end of the tunnel and fortune favours the brave, these uncertain times have made it even harder for individuals to secure finance. Although borrowing is never an ideal situation, it is a necessary evil these days whether this be personally or for your business.
The problems lie in the fact that the larger, more reputable lenders now have very strict criteria you need to adhere to for them to even think about lending to you. Add to this the fact that there are new, less reputable and often extortionate loan companies out there and you have a marketplace which is volatile to say the least.
If you are one of the countless thousands in the UK who has been turned down for credit recently, then take a look at the five following pointers. Getting to grips with these could well see you successfully obtain a loan in the future.
You’ve Never Borrowed Before
Although this may seem a bit unfair on people who have never borrowed before, it can be bad for your credit rating if you have no history. Loan companies unfortunately like to see evidence of how you pay your debts back and if you have never borrowed they can’t see that. So, it is sometimes in your interest to take out credit and then make sure you pay it back on time.
You Don’t Suit Your Lender’s Criteria
Just because one lender has refused you, it doesn’t mean the next one will (although this does not mean you should apply at will as this leaves a footprint). Every lender will have a credit rating, socio-economic group and demographic they target so just do some research as to what the right company is for you. The web is a great resource for this and you can always speak to the lender in question before you apply.
You Have Applied for Too Much Credit
As alluded to above, every time you apply for credit it leaves a blemish on your credit footprint. If a lender sees that you have been getting rejected for credit left, right and centre then they are unlikely to lend you any money. You can check on the likes of Noddle and Experian to see the companies that have taken a look at your credit profile.
We have all been there and it’s nothing to be ashamed off, but previous arrears are pretty detrimental to your credit rating. Missed payments, defaults and county court judgements (CCJ’s) will really harm your overall score and scare the big lenders away. There are sub-prime lenders who will deal with bad credit customers but this is when you see the interest rates go through the roof. These arrears can take six years from the date you settle them to disappear from your record. If you do need help with your debts then using tools such as The Money Advice Service or Satsuma’s Debt Support page can give you the necessary help you need.
Get On The Electoral Roll
This is seen by many as a clever way for creditors to find you but let’s face it, it’s no good trying to hide! But when you sign up for the electoral register using your address, its gives your credit rating a boost. So, by going all Russell Brand and abstaining, you are harming your chances of obtaining credit. Get on there and ensure you are taken off for any previous addresses whilst you are at it.
There you have it, the five top reasons why you are most probably being turned down for credit. Deal with these and you will be looked at a lot more favourably by at least some of the most prominent lenders in the UK.