When doing research for a loan make sure you don't actually apply for several loans at one time. This is because, if you make several full scale applications, these will leave a credit search record on your credit file. Multiple applications often indicate multiple refusals, so new lenders looking at these records will probably assume that other lenders have turned you down and may follow suit.
Look for loan agreements in principle without consenting to a full credit search and then you can make the decision about which is the best loan for you and then make your proper application. If you are refused credit it's always important to find out why. Go to Experian and find out what is on your report that caused this. Although not legally required to most lenders will tell you why you have been refused a loan so don't hesitate to ask in this eventuality. Don't apply for another loan until you know why you were refused.
What are lenders looking for? Obviously it's very important to the lender that you should handle the repayments of your loan and if you have been largely credit free in the past you might find it difficult to get the best rate for your loan. The only way a lender can judge your ability and attitude towards repaying loans is your credit track record so although you might think because you haven't been borrowing regularly you're a good bet the lender might not see it that way.
It's a good idea to get a credit card and run it for a while responsibly for a while and also a mobile phone. Once you establish some track record the best rate loans may come within reach.
It's important not to be overstretched when looking for a new loan (and maybe more important not to appear to be overstretched!). Lenders will always look at your credit record to see what you have outstanding in loans, mortgages etc and they immediately see how you are handling your current payments. If you have idle credit cards then it's a good idea to close those accounts as lenders may get nervous about your spending suddenly getting out of hand if you have instant easy access to more money.
Always explain any deficiencies in your credit file. If you have negative entries in your credit file and maybe are having a bad patch financially then it might be better to take some good advice rather than just go out and borrow more money. Missed repayments on your file will remain there for 3 years whilst any bankruptcies, Court Judgements or IVAs will always stay on record for at least 6 years.
Always explain if you have had a problem due to special circumstances. If you have been ill for example and it affected your earnings then you can add this information to your credit report and most lenders will probably take this into account when considering your application.
If you are having trouble getting a loan make sure you stay away from companies who say they can repair your credit record. Unless a serious mistake has been made on your file this is not possible and if a serious mistake has been made then you can easily repair this yourself. Never fall into the trap of paying for credit repair or debt advice which means rescheduling debts.
If you struggle getting credit, the first step is to review your spending and if you are having problems with your debts then get advice from a debt counselling service .
One very simple and quick way to improve your credit rating is to register on the electoral roll if you aren't on it already. Credit reference agency Experian tells us that lenders use the electoral roll as a precaution against fraud, to help check that you are who you say who you are and live where you claim to live. If you are registered at a different address to the one on the application form, or don't appear on the electoral roll at all, they may ask for proof of residence or could simply turn you down.
Look for loan agreements in principle without consenting to a full credit search and then you can make the decision about which is the best loan for you and then make your proper application. If you are refused credit it's always important to find out why. Go to Experian and find out what is on your report that caused this. Although not legally required to most lenders will tell you why you have been refused a loan so don't hesitate to ask in this eventuality. Don't apply for another loan until you know why you were refused.
What are lenders looking for? Obviously it's very important to the lender that you should handle the repayments of your loan and if you have been largely credit free in the past you might find it difficult to get the best rate for your loan. The only way a lender can judge your ability and attitude towards repaying loans is your credit track record so although you might think because you haven't been borrowing regularly you're a good bet the lender might not see it that way.
It's a good idea to get a credit card and run it for a while responsibly for a while and also a mobile phone. Once you establish some track record the best rate loans may come within reach.
It's important not to be overstretched when looking for a new loan (and maybe more important not to appear to be overstretched!). Lenders will always look at your credit record to see what you have outstanding in loans, mortgages etc and they immediately see how you are handling your current payments. If you have idle credit cards then it's a good idea to close those accounts as lenders may get nervous about your spending suddenly getting out of hand if you have instant easy access to more money.
Always explain any deficiencies in your credit file. If you have negative entries in your credit file and maybe are having a bad patch financially then it might be better to take some good advice rather than just go out and borrow more money. Missed repayments on your file will remain there for 3 years whilst any bankruptcies, Court Judgements or IVAs will always stay on record for at least 6 years.
Always explain if you have had a problem due to special circumstances. If you have been ill for example and it affected your earnings then you can add this information to your credit report and most lenders will probably take this into account when considering your application.
If you are having trouble getting a loan make sure you stay away from companies who say they can repair your credit record. Unless a serious mistake has been made on your file this is not possible and if a serious mistake has been made then you can easily repair this yourself. Never fall into the trap of paying for credit repair or debt advice which means rescheduling debts.
If you struggle getting credit, the first step is to review your spending and if you are having problems with your debts then get advice from a debt counselling service .
One very simple and quick way to improve your credit rating is to register on the electoral roll if you aren't on it already. Credit reference agency Experian tells us that lenders use the electoral roll as a precaution against fraud, to help check that you are who you say who you are and live where you claim to live. If you are registered at a different address to the one on the application form, or don't appear on the electoral roll at all, they may ask for proof of residence or could simply turn you down.
About the Author:
Mr Marsh is a Financial Adviser in the UK and runs a prolific cheapest rate loans website. If you require a low rate loan then please click the link above and apply today. Lowest interest rates guaranteed! You can get a unique content version of this article from the Uber Article Directory.
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