These are nervous times in the financial market and unfortunately that fact is impacting on customers too. The more banks worry about their money, the more care they take before lending it to us – and that has seen loan applications rejected in recent weeks over matters as small as an unpaid £5 mobile phone bill.
In fact, some statistics suggest that around 20,000 people a day are being turned down for personal loans. Barclaycard has been rejecting about 55% of all applications to its credit cards in the last few months, up from 50% in 2006 to 2007 – and with Christmas on the horizon the market for credit is expected to get tighter.
So if you are looking to borrow money, what can you do? Here are my three top tips:
Make sure your credit records are accurate. Get a copy of your credit report, iron out any inaccuracies and do all you can to boost your credit rating by paying your bills on time.
Make sure you are on the voter’s roll. Lenders check where you live and being on the electoral register will always score a few brownie points.
Be careful not to make too many credit-related applications – remember the more you are rejected the worse your credit score will be.
One way of ensuring you don’t make too many loan applications is to use our SmartSearch tool. It asks you a series of straightforward questions to gain perspective on your credit score without leaving a footprint on your profile.
Then it searches and returns results based on your likely credit rating – giving you a list of loan rates or credit cards that you’re much more likely to be accepted for.
There are plenty of good offers in the loans market – although rates are slowly creeping up.
Whereas in the past lenders were happy to overlook small glitches on your credit profile now they are searching for reasons to refuse people – so don’t give them any more reason to do that to you.
THINK CAREFULLY BEFORE SECURING DEBTS AGAINST YOUR HOME. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.
DISCLAIMER: Please note that any rates or deals mentioned in this article applied at the time of writing and may no longer be available/applicable today.