You’ve just seen your dream car and you decide right there and then, it’s yours.
You go online and you start frantically applying for all the loans under the sun. Hoping that one will accept you.
However, here’s the thing:
This could actually get you rejected.
Lenders can see if you have applied for credit in recent weeks and if you’ve made a lot in a short period of time, this sets of alarm bells.
It is not uncommon to be rejected because you’ve made too many recent requests.
The thing here is to slow down and don’t apply to every lender all at once. It is also important to vet the lender beforehand and check all your data to see if you can be rejected.
Think carefully about which lender you want to go with before diving in and applying to every single one.
There’s Inconsistencies in Personal Information
You’ve jumped online and you want to borrow some money.
You fill in all the details you need and you leave the browser.
A few days later, your application has been declined…
Your credit report was fine. You haven’t got any recent late payments. Why were you rejected?
In most cases, you’ve probably incorrectly typed in wrong information.
This might seem like a simple mistake but it happens.
The most common mistake is with addresses, especially when a flat is involved.
Make sure you check and double check your information before you send off your application.
You Might Not Meet Their “Criteria”
The truth about most businesses is this:
They have their target customer.
If you don’t match this customer than, in some circumstances, you might not receive any service.
This is not only true with fancier places, as it is common for lender to prefer certain customers over others.
In particular, many lenders prefer high-income customers.
If this is the case, you could turn up with a perfect credit score and report with an average income and still be rejected.
How stupid is that?
When this happens, there’s little you can do about it. This is why you should always vet the lender before approaching. It will save you a lot of time and energy.
Got Rejected? Don’t Worry, Some Lenders Can Still Help You Out… For a Price
If you’ve been rejected for credit, there’s no point getting upset about it.
There is still hope.
There are many lenders who will still give you the loan. Even if your credit is bad and you have a few recent late payments.
However, don’t think that these lenders are going to give you the loan with no strings attached.
With a bad credit score comes one thing…
An increase in interest.
Just because the lender advertisers one APR, doesn’t mean they have to stick with it.
Lenders can operate on a ‘rate-for-risk’ basis. This basically means that they can up the interest for specific customers if they feel you won’t make payments in time.
It is a way for them to cover their backs.
This is why it is so important to keep your credit report clean. You don’t want to be paying more for a loan than you already have too.
Summing it up
There are many reasons why you might be rejected credit.
In some cases, you might not be told why. It is your job to ask and find out.
Above are a few common reasons why you’ll get rejected. Some of them are out of your control. Because of this, you need to vet the lender before you go ahead and apply for a loan.
If you keep a clean report and make your payments, you’ll look as good as gold to the lender.
If you don’t…
Well, you might be facing higher interest rates.
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