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What to do if you are Declined Credit

published  First Published: 24/01/2010
Article written by: Darryl Houston
An overdue account, known as a credit default may be listed,
Incorrect information is on your credit file,
Someone is using your identity to illegally obtain credit and has defaulted on the payments.
 
Nigel Brookson from My Credit File Report says that many people are declined when applying for credit, whether it be for a credit card, a car loan or personal loan, and have no real understanding of why; and often all the customer is told from the lender is "You don't meet our lending criteria".
 
the problem with this is then the customer applies to lender after lender continually getting declined, and not understanding that they are making matters worse for themselves.
 
Each time a person applies for credit regardless of the type of credit, or the amount, the credit provider can and in about 99% of cases, does list the enquiry for credit on the persons credit file, so each time the customer applies for a loan or even for a phone connection it is listed for every credit provider to see.
 
In this economy any more than 2 enquiries in 3 months, 5 enquiries in 6 months is a signal to lenders the person is credit shopping, and this is frowned upon by lenders.
 
The lenders can also talk to each other getting credit references from each other, because of the 'Privacy and Consent' form you gave permission for this to happen, and they can effectively compare notes on the application and the result, i.e. whether the application was declined or approved.
 
This is one of the reasons why lying on the application, thinking that it will 'look better' if you do just does not work.
 
Most consumers don't know what a credit file is, let alone seen theirs, Mr Brookson says.
 
And this is the first step that should be taken after a credit provider says No.
 
Infact knowing what is on your credit file is something that should be done before applying, so you know all the facts about your credit history, and by using a service like My Credit File Report, you will not only get a copy of your credit file, but a detailed analysis of your credit health, with your credit score as well. this analysis or credit file report will explain your chances of getting a loan, and what to do if you have been declined credit, and what to do to improve your chances of a lender saying Yes.
 
Each lender follows the same lending criteria as documented by Mr Brookson's 6 'C' of credit assessment, or loan criteria, the factors that impact on the decision whether the lender will say yes or no to your application for credit. Although each lender places a different amount of significance on each criteria, they all use the same basic set of lending guidelines.
 
You can read more about what a credit file is at My Credit File Report.
 
Ther could also be errors on your credit file, for example a default that was listed is still shown as unpaid, yet you had paid it months or years ago.
If you have an Overdue Account (Default) on your file that has been paid but has not been updated, then contact the credit provider listed and ask them to show it as being paid, dated the date it was.
 
You may also have an enquiry for credit that is not yours, or worse a default listed with a credit provider that you have never applied to, again contact the credit provider concerned.
 
The important thing to remember is when you have been declined credit you must find out why before applying to someone else, or you are going to unsuccessful for a very long time.
 

 

Related Article: Credit Repair Tips

 

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