Applying for credit, be it a loan or a card, can be a straight forward process. You can do it online, or in the bank, submit your data and receive confirmation you have been accepted with days or weeks.
In most cases, it isn’t so easy and some applications can come back saying you have been rejected. It’s a horrible situation and can leave you feeling frustrated, especially when you needed that money for an emergency.
You will also be left wondering why you have been rejected, so here are some reasons why you have may been and what you can do in the event of a rejection;
– Mistakes on your applications
It can really be something as simple as a spelling mistake, missing a zero off a salary or accidentally ticking the wrong box to say you have children. Accuracy is important when filling out an application and you can always request a copy from the lender if you have been rejected. Check through to make sure there weren’t any mistakes and remember to thoroughly go through your application when you apply next time.
– Lack of credit history or poor credit history
If you haven’t built up a credit history, some lenders may be a bit reluctant to give you a loan or a credit card. A good credit history will give the lender an idea of how you manage debt and repayments. If you’ve been good with payments, a lender will see that you are reliable with handling credit. If you have not been efficient with payments and have had defaults, it will reflect badly on your credit report. If you haven’t got a credit report, it is advisable to look into applying for one online.
– Too many applications
If you’ve been refused credit once, it may be tempting to try and apply again. If you want to do this, give it a few months before doing so. If you’ve applied for too much credit in a short amount of time, this again will be reflected on your credit application and a lender may feel that you have become desperate for cash (Which is never good).
– Not on the electoral role
Lenders will want to avoid fraud at any cost. They will also want to be able to look you up and see if you are, who you say you are. Getting yourself on the voting register will prove to the lender that you are a real person, so there is no fraudulent activity going on. If you are not on the register, this may be a cause for refusal. To avoid this, get yourself on it.
– Credit restrictions
Some lenders do have a certain criteria that borrowers have to meet in order to be suitable for credit. I.e. Income, age and history of managing credit, in this case it is advised to have a look at other credit providers to avoid these restrictions.
You should also contact the provider who rejected your application. They can give you the answer as to why your application was rejected. It is always worth having a credit report, to keep an eye on the status on your credit score so you know if you have to improve your credit rating.
By Harry Price
Harry Price is a writer, poker player and entrepreneur. He enjoys going to the gym and being a personal trainer.