At The Lenders List, we often get asked why did my application for a payday loan get refused? We never know the actual reason unless you ask the lender directly but for those with a poor financial history you may be able to get a short term loan by looking at our guarantor lenders site. Those who are still left wondering why their credit rating was affected in the first place then here are some of the most common reasons as to why it may not be as great as you thought it was.
You’re not on the electoral roll
One of the most important factors when looking at your credit rating is making sure that you are registered on the electoral roll at your current address, this information is publicly available and contains address and residence details about yourself. It’s often used for security purposes and gives the lender more confidence about who you say you are. You can register and update your details online at GOV.UK anytime.
Financially Connected to someone who doesn’t have a good score
Often the last thing you would think of, but having a joint financial commitment with someone who doesn’t have a good credit score may affect your credit file. Although this can work both ways – if you have an association with someone with a “perfect” credit history it may work in your favor and give your score a boost. A slightly awkward conversation to have with a partner, but when applying for loans such as mortgages it always best to discuss and look at each others credit files as missed payments could bring each others credit score down.
Loads of Applications in a short period of time
Repeated applications in a very short period of time may also bring down your credit score, as lenders like to see stability when it comes to applications being made. We don’t have a set rule but if you have been declined for a loan with a lender it’s pointless trying to beat the system with making another application as this leaves a footprint behind every time a credit check is being completed. We would always suggest waiting a minimum 30 days between applying for any form of credit.
Failed payments in the past
An obvious one but if you have missed payments in the past then this may be having a negatively affect on your credit file. Often mistakes made when we are younger are such as missed bills and mobile phone contracts may still be having a negative affect on your file. Failing to pay back credit on time or in full will be marked on your credit file for up to 6 years and will have an impact on your credit score.
Never had credit in the past
A catch 22 but if you have not had any credit in the past it may be a reason why your credit score is lower than you think it should be, often lenders like to see evidence that you have borrowed money in the past and this has been paid back correctly and on time. Often suggested to building up credit by taking out a credit re(build) card and purchasing low-value items and paying this back on time will most defiantly help your credit.
Contact credit referencing agencies
If you wish to get details of your credit file please visit Experian or Equifax, they are two of the biggest credit reference agencies in the UK and they are who lenders use most to get information about your credit history. If you can get your credit file it may give you a better idea of why your credit may be poor and what you can do to improve it.