It is easy to get rejected when applying for credit. Your credit score could be very poor, your loan application may have a few missing holes, or the loan manager might not just like you. In other words, there are a lot of ways your loan application could get rejected. Banks and other credit facilities have dozens of hoops in their criteria that they expect applicants to jump through. The only way to make sure you never get rejected when applying for credit is to ensure you cover all bases, and this post shows you just how.
Don’t spam the applications
Every single time you apply for credit or a loan, it leaves a mark on your credit file and this has the potential to lower your credit score. The reason for this is simple, a high number of loan applications, especially within a short period, makes the applicant look desperate. Banks do not like desperate people, except they are collecting money from them, that is.
Register to vote
One of the ways most credit facilities screen out applicants is by checking the Electoral Roll to confirm their identities. If the address listed on your loan application is different from that listed in the Electoral Roll, you most likely will be rejected. Registering to vote is an excellent way to confirm your identity.
Pay your repayments on time
Missing payments on your credit card is a really excellent way to plan for future rejections. If you default on your payments, no lender will want to trust you. Ensure you pay up on time by setting automatic transfers with your bank.
Avoid maxing your credit card
Maxing out your card does not show you are awesome and love shopping a lot. It shows you are in trouble financially. The rule is to borrow only 30%-40% of your credit max at any time.
Close out accounts you are not using
If you have a credit card you are not using, you should close down the account. Many lenders get worried when they get applications from individuals who have unused credit available in other accounts. This is because, there is a certain amount of credit lenders will allow per individual. Having past that amount makes it unlikely for your loan application to be accepted.
Build a credit history
While you must be careful to avoid borrowing all the time and racking up a history that shows you as a chronic borrower, you should also take care to build a history that shows you regularly fulfilling payment obligations. This will show banks and lenders that you are trustworthy and make it more likely for your loan to be granted.
Another thing to consider is your personal stability. Borrowing all the time from different sources with late payments, changing jobs and residential addresses often within short time frames, indicates a personality of someone who is unsteady. Banks and credit facilities do not like to lend to people who are unstable. By staying at the same address or job, and borrowing as infrequently as possible, you will demonstrate a sense of stability that will impress most lenders.