Why Am I Being Declined For Credit?
Being declined if you apply
for a loan is the most frustrating thing in the world,
especially when you have no idea why the credit companies are
declining your application.
The reasons they give you tend to be very vague and unrevealing,
using phrases like ‘too many revolving lines of credit'
or ‘not enough established credit' or other reasons
that you really don't understand or make sense of. If you've
had a mobile phone contract, you've had a line of credit. If
you've had a personal loan or a credit card, you've had
a line of credit. So why do these lenders keep denying you?
The likelihood is that the problem you have has less to do
with how many lines of established credit you've had and everything to do
with the way you paid on those lines of credit. Your credit history contains
information on every single line of credit that has been reported to the
crediting agency and if you should happen to have CCJs, defaults, and late and
missed payments showing up on your credit report, then your credit is being
negatively impacted by them and bringing your credit score down.
Lenders use that credit score to decide whether or not they want to give you
credit, and the only way you can even start to bring that number up is by making
regular payments to your creditors for about a year after the payment you
How much credit have you applied for in the recent months?
If you answered that question with an answer such as ‘a lot', then
being denied credit could be stemming from all of the applications you have put
in. Applying for too much credit in a short period of time impacts your credit score negatively, and many lenders see this
as an act of a desperate person and possible credit risk. Honestly, they don't
care what your personal situation is, and all they see is how many times you've
applied and been denied. Stop trying to get a loan if you're being denied
over and over again. It will take about six months for your credit record to
balance itself back out and have all the applications disappear.
you have moved and you did not file a new registration card with the Electoral
Roll, you could be denied credit. Lenders will not give people a loan if their
addresses do not match. Additionally, if you are consistently on the move with
as many as five different addresses over a two year span you will not be
approved for credit by a lender. They look at this much movement as a sign of
instability and no continuity. Once again you look like a risk to them, and they
are simply not going to take a chance on you no matter how decent the rest of
your credit report looks.
Employment history is the final factor in why you may be
declined for credit, and it comes down once again to stability and
continuity. The longer you have been in the same job with the same company
the better your chances are of getting a loan. Stability and the overall
state of your finances are key to getting any form of credit line. Pay your
bills on time, stick with your job, and stay in the same place for about
five years and you will find that you will once again be able to qualify for
a loan or other type of credit line. However, easier said than done! If you
find that, for example, you have had to move regularly (maybe because of
your job, maybe because you were just moving to bigger and nicer houses)
then it is always worth explaining this to the credit company that you are
applying to. They always have discretion over these things and can sometimes
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