Friday, 15 April 2016

Finance Fridays – How to deal with being refused credit

Finance Fridays – How to deal with being refused credit
Welcome to this week's Finance Fridays. Last week we were looking at 6 things which are now more expensive. In order to afford some of these price rises you may be tempted to take out some form of credit arrangement. Credit can come in many forms from credit cards to loans plus also mortgages. Even if you think you have a perfect credit rating you can be turned down so what do you do when you are refused credit?

Ask the lender – The thing you need to do is check with the lender why they have refused you in order to get some idea where the fault lies. They may be able to help you out but annoyingly some lenders now have customer profiles which you simply don't fit no matter how rich or poor you are.

Make you applied correctly – You may have been turned down on the basis of a typo! If your address didn't match because you typed your house number in wrong you may get refused. Also make sure details such as how long you have been in your current home and job are exact rather than just guessing. You need tp apply in your full legal name rather than any diminutive or nickname.

Too much credit – If you have several credit and store cards on the go, a car loan, mortgage and a hire purchase arrangement on some furniture it could be some lenders feel you have too much to pay off at the moment. Try to slim down your credit arrangements so you don't owe so much money all over the place.

Request your credit score – If you are still in the dark as to why you have been refused get your credit report. Companies such as Experian and Equifax offer a free trial so you can obtain your credit report. Make sure you cancel during the trial period otherwise you may start being charged a monthly fee for the service.

Check the report – The credit report will show any credit arrangements that have been taken out in your name in the last six years. Check you recognise all of them and make sure nobody else has been applying for credit in your name.

Break with the bad – The report may show you are linked to someone with a bad credit rating. Perhaps you still have a mortgage in a joint name with an ex-partner even if you make all the payments. It could be a record of something that is now fully paid off but being linked to them in the past is still dragging you down. Apply to have them wiped off your record.

First time credit – The catch 22 situation is if you want to be approved for credit often you need to have taken out credit in the past. To get your credit score up be financially responsible so start setting up some payments as direct debits to sure you are seen as a reliable payer.

Get on the electoral roll – Lenders always like to see your name listed on the electoral roll. You have to confirm your details each year so it can be easy to miss doing it. If you have local elections in May and not received your polling card yet it probably means your name isn't on the register. Check with your local council.

Have you ever been refused credit? Do you check your credit report regularly?

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  1. Some fab tips there. It is hard to get your credit rating back, but you can work at it and improve it

  2. Yours post on finance are always informative and interesting.

  3. Great pointers for people who may have been refused credit. Just shows there are things you can do in this situation.

  4. Some fabulous tips here - I checked my credit score and found problems on it which I am trying to get rectified

  5. Great advice for anyone who has been refused credit. An interesting post as always x

  6. So many great tips, it's so interesting to know the steps that can be taken to improve a situation.

  7. This is so useful and great tips, it's best to be practical about it and try to methodically go through the steps.

  8. A great set of tips. We do keep an eye on our credit score, but there was a time when I didn't...


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