What Can You Do If Your Loan or Credit Card Application Is Refused?
Banks and various private lenders are not often clear when it comes to explaining why they refuse application loans. Unfortunately, this lack of transparency leaves many individuals in a limbo where, without knowing why they were turned down, they continue to submit applications to other lenders. This can actually lower one’s credit score due to the fact that each application and refusal is noted in one’s permanent financial records.
Now, in most cases, the bank that you’ve submitted your application to may give you at least basic information as to why you did not get the loan.For example, if the refusal is based on a credit reference file check, the lender will inform you of this and also tell you which credit reference agency they have used. While it may not seem like much, this will give you a lead that you can follow in order to find more information.
Note that you may ask the lender for further information, however, they are not obligated to give you any other clarifications. Instead, there are steps that you can make in order to discover what the issue is and to correct it.
Do Not Submit Any Other Applications
All the applications that you submit, regardless if they are approved or not, will still be marked on your permanent financial file. Each additional application that you make will further decrease your chances of getting a loan. If you believe that another lender may approve your request, wait 4-5 weeks before sending it. In other words, always space out your applications as much as possible.
How to Identify the Issue?
Once the lender tells you the name of the reference agency used, go online and check your credit reference file. All agencies are obligated to disclose this information once you make a request and the file will tell you everything that you need to know about what has reduced your credit rating.
Keep in mind that there are several credit reference agencies and each of them may have a different way of calculating your credit rating. Be sure to check the other ones in order to establish what is your exact chance of getting a loan.
What Options Do You Have at This Point?
Depending on what you applied for, there may be a few things that you can do in order to solve your initial problem.
- Repaying Outstanding Debts – If you need the loan in order to repay other debts or to pay your bills, you may want to consider using the services of a free debt adviser. They are able to look at your credit rating and offer other options that you may not have considered;
- Funding a Large Purchase – If you needed the money for a large purchase and have estimated that you would be able to afford the repayments, you may want to consider lenders other than banks. There are many online lenders that offer similar services to those of banks. However, only do so after you’ve taken a look at your credit report;
Having your credit or loan request refused by the lender is never a pleasant experience. However, there are always steps that you can take in order to resolve the issue. Request to see your credit report, check all available credit registers in order to determine your current credit rating, avoid sending any more applications and work towards building up your credit score. While it may take some time, this is the most reliable way to ensure that your future applications will not be rejected.