Applying for credit and being turned down is something a large percent of the population go through. It can also come as quite a shock followed by disappointment and then confusing. What makes matters worse is Lenders wont give you any information as to why they refused you credit leaving you to either forget it or research the reason why. Luckily for you, you found this article so that means your trying to find a solution to your credit refusal problems.
during your research you might find its something that’s easy to fix such as a mistake on your credit file but it’s important you don’t think that because you fixed the issue you can apply again straight way and of course always better to check your credit report before you apply.
Fortunately, we have provided some useful information to narrow in on whats causing you issues in getting credit.
Reasons For Rejection
There are many reasons why you might have been rejected for credit. Typical examples tend to be missed payments, defaults, no history of credit, or have access to a lot of credit. Each lender will be looking for certain problems on your credit report. While some may grant you credit with a default, for example, others may not.
Another reason may be you are not currently on the electoral register, maybe you just moved house or have not registered yet. You can also be refused credit if you have links to someone who had a bad credit report.
Other possible reason could be you have fallen victim to identity theft, and you don’t know it. This happens when someone uses your details to obtain credit. If you don’t check your credit report, you probably won’t know about it until you get letters through your door or even worse bailiffs.
It’s Time To Do Some Research
The first thing you must do is get a copy of your credit report. Currently, there are three leading credit agencies that operate in the UK, Callcredit, Equifax, and Experian. You should get a report from all three agencies as lenders will use one or more of these when you apply for credit and you may find a mistake on one or all three of these companies.
Getting a copy of your credit report will cost £2 per company tho some do offer a monthly subscription which includes a free trial which will give you more benefits than just your report. Make sure that if you sign up for a free trial and don’t want to continue, you must cancel the subscription, or you will be charged, typically £14.99 or more.
These companies will show you a history of your finances for the last six years. This will include any credit cards, loans, and mobile phone contracts, for example, you may have had and how you have kept up with repayments.
What To Look For?
When checking your credit report, you should take things slow. You want to make sure everything is correct. Start by looking for any accounts which you didn’t apply for to rule out any identity theft, for example, mobile phone contracts, credit cards or loans. Then you should make sure that the information presented in each account is correct. For example, if you know that you made a payment on your credit card, but your report shows you missed a payment you can challenge this. This could be a reason for rejection by lenders, so its important rectify any mistakes on your credit report.
You should also be on the electoral register. If not then you should apply straight away. Councils usually have set dates throughout the year where they update residents details, so this may not show on your report until such time. The reason it’s important for you to be on this register is from a lenders perspective they can track you down to recover the debt if you fail to miss any payments. Lenders like to see a history of where you have been living and currently living.
If you have never had credit before then this can also be a factor. Lenders like to lend to people who have a history of making repayments on time. If you have no debt or don’t have a history of having any debt, this can go against you as lenders are unable to tell what sort of customer you will be. If this is the case then you may want to try and build your credit score by using a credit boosting credit card.
If everything looks ok then you may have just been refused by a lender who is looking for a particular type of borrow. This is nothing personal to you but companies do have a certain type of person they prefer to lend to so even if you had the best possible credit score you may still be refused.
By using the points in this article you should be in a better position to understand your credit refusal and have a better chance in the future.