Credit Rating
One of the top reasons that a personal loan application gets rejected is because someone has a poor credit rating. A lender will view an applicant’s credit report to find out if that person is in a position to be able to pay back any money they borrow. If they have a poor rating, based on a history of getting into too much debt or not making repayments on time, it can affect an application.
To improve your chances of getting personal finance, check your credit report. Make sure that there are no mistakes with regards to your loan history. If there are, seek to get them amended. If you have been a victim of identity theft, this could affect your credit rating, so check to see if there are any suspicious debts or loans on your report that you have had nothing to do with.
If you have a history of debt, try to resolve your debt issues, budget wisely from now on and find ways to reduce spending. Proving that you are in control of your finances and would make a responsible borrower can help to increase your chances of being approved for any personal loans.
You may also have a low credit score if you have been financially linked to someone else in the past who may have had debts – even if you haven’t. If you are no longer financially connected to this person, get the link removed.
Not Registered to Vote
A lender will check the electoral roll to verify your identity. If you are not registered to vote, this can have a negative impact on your ability to procure personal finance.
Make sure you register to vote and that all of the details you provide are correct and up to date.
Making Mistakes
An application for a loan is often refused because errors are made on the form. Always take your time when filling out application forms to reduce the likelihood of making mistakes. Even if you made the errors unwittingly, it could be taken as fraud.
Too Many Searches
A person is often refused personal finance if a credit report reveals that numerous searches have been made. Each time a lender checks your credit rating, a note is made on the report. A prospective lender may hear alarm bells ringing if your report is riddled with checks from other lenders. It could lead to the assumption that you are desperate for cash or are over-extending your finances.
Check your report to make sure that there are no searches on it that shouldn’t be there. If searches were made because you only wanted a quote and had not actually made any applications, make this clear to the lender to improve your chances of being approved.
Avoid making too many loan applications, especially at any one time, and instead just focus on a specific product or lender to reduce the number of searches that get noted on your report.
Not Fitting a Lender’s Profile
Applications may be turned down if someone does not fit the target customer profile of the lender. This can be based on a number of factors, so it is worth finding out about the lender’s guidelines or preferences before you apply to ascertain if you fit this profile. Avoid wasting your time and increasing the number of searches on your credit report by applying to the wrong type of lender for your circumstances.
If you are refused personal finance, always find out why your application was rejected. Knowing the reasons can help you to rectify the situation so that you may be in a better position to get a loan approved next time.