It’s imperative to understand the reason(s) for your rejection before reapplying. Your credit score and chances of getting approved will suffer if you submit numerous credit applications quickly.
Why Did My Credit Request Get Turned Down?
Some common justifications for credit refusals include the following:
- The specific requirements for a lender has not been met. It’s critical to remember that the decision is ultimately made by lenders and not credit reference agencies.
Because there is no one “pass mark” for credit assessment, you should ask the lender why you were declined. Each creditor or lender has a unique set of guidelines and standards.
- Your name and address were not able to be verified by the lender. This occasionally happens if you haven’t registered to vote, recently changed your name or address without alerting the lender, or both.
- Your credit history is not sufficiently long enough. Lenders like to see documentation of your prior credit repayment accomplishments. If you have never used credit or are a recent immigrant to the country, there may not be enough information for lenders to accept you.
- Your credit history shows you have missed or late payments, defaults, or county court judgments. These can indicate that you’ve had trouble paying off debt in the past.
- You have either a personal voluntary agreement or a debt management plan. This might mean you can’t afford to pay more debt now.
- You recently applied for several credit applications. This could alert lenders that you might be experiencing financial issues.
- You are related to someone financially who has a bad credit history.
- You’re not their market. For instance, some lenders will only give money to people who earn a lot of money or little money.
- Your professional history. Recent work and salary data can be a trustworthy indicator of stability, which is a point that lenders take into account, even if it isn’t recorded on your credit report.
- Your credit report. Knowing the information that is excluded from your credit report is also crucial. Missed payments for rent, parking fines, child support, or the interest rate on your existing debt have no impact on your credit score. Thus they are not shown in your credit report.
The easiest way to find out why you were turned down for credit is to ask the lender for an explanation. But it’s also beneficial to get a copy of your credit report, examine it for accuracy, and do the items listed above.
If you once were rejected for credit, think carefully before applying again.
Your credit report will reflect all credit requests you make, regardless of whether they you were approved for the credit.
Multiple applications might suggest that you have a pressing need for funding.
This could further hurt your credit score. Your credit rating affects your capacity to borrow money and how much you can borrow.
Additionally, it can affect the interest rate you are charged.
How Do Lenders Choose Their Customers?
Lenders may review your application and credit report to learn more about your credit history. They could also use any information they already know about you (for instance, if you are a previous customer).
The lender will always decide whether to accept or reject your application. Credit reference agencies are powerless to intervene and are not informed when you are turned down or why.
What to Expect if Credit or a Loan Was Refused
The lender frequently withholds the reason you were turned down for financing, and even if you inquire, they are not obligated to reveal it.
However, they are required to make public the credit reference company they used to assess your application.
A copy of your file can be obtained from the credit reference agency.
Write to the credit reference company and request that they correct any mistakes you see in your credit file.
Include any supporting materials you have and state why the information is erroneous.
There are 28 days for it to act. Relevant material on your credit report will be marked as “disputed” while they investigate it. To know more, you can also seek mortgage advice in Brighton.
Conclusion
Being refused credit can be a frustrating experience. It’s crucial to keep in mind that you can do things to strengthen your creditworthiness and raise your chances of receiving loans in the future. By understanding why you were refused credit, taking steps to improve your creditworthiness, consulting with mortgage advisors in the UK, and knowing your rights, you can improve your chances of being approved for credit in the future.
We at Everest Mortgage Services understand that life requires us to make significant financial decisions. You should consider some things, such as getting a mortgage for your first home, a loan to pay for a significant purchase or life insurance to protect your loved ones. As industry leaders, we are committed to providing personalised mortgage advice suited to your circumstance. Let’s talk today!
