Turned down for Credit Declined Credit Credit Application Credit History

If you have ever been turned down for credit there is a reason for that. Unfortunately many lenders still do not give you enough information or clear guidelines to work it out yourself. Credit companies like keeping their lending criteria secret, however there is a way to find out carrying out some simple checks detailed below.

There is nothing more disappointing than trying to arrange your finances and then being refused for credit. That happens to more and more people these days, as lenders have made their lending criteria much harder to meet since the credit crunch struck. Here is a way to check what did go wrong with your application and why you were turned down for credit.

. Your credit history

Your credit history is making up up to 35% of your credit score. So it is important to have a good credit score when you are applying for finance. The first thing you have to check when you are refused credit is your credit report to see if there is anything in there that might have affected your credit assessment, like late payments, disputes.

Your affordability

Lenders choose to refuse credit based simply on your income and expenditure. Remember that by checking your credit report they are going to see exactly how much credit you do have at the moment and how much are you paying each month on it. There is no way to hide this information from the lender and they are more than likely to assess your monthly budget and determine your free monthly income. If this is under your proposed new credit repayments, you can still get refused credit with a perfect credit score.

Linked records

If you have never missed a payment but there is bad credit in your household, your credit record is linked to other people’s that can affect your chances to get accepted for credit, Therefore you will have to have a honest discussion with your spouse or grown-up children to see if they had adverse credit history that made your credit application turned down.

Overall profile

Lenders tend to build up an overall profile of existing and potential customers. They do have different criteria to do that. And sometimes they tend to lend new money for only people whose profile does match their “ideal customer” profile. This usually happens when credit is very tight or lenders have a limited source of funds available.

There is always a way to find out why you have been turned down for credit however instead of blaming yourself or the bank the next steps should be to eliminate the reasons for the declined credit application and improve your credit profile to play safe and get accepted next time. If after doing the above checks you still think the bank made the wrong decision, you can still appeal in writing.