Credit Crisis - Can I still get a loan?
When doing research for a loan make sure you don't actually apply for several loans at one time. This is because, if you make several full scale applications, these will leave a credit search record on your credit file. Multiple applications often indicate multiple refusals, so new lenders looking at these records will probably assume that other lenders have turned you down and may follow suit.
Therefore the best policy is to look for loan agreements in principle without allowing a full credit search, and only make one real application when you have decided which is best for you. If you are ever refused credit, don't apply again until you have found out why this has happened. Now is the time to check your credit record. You should ask the lender why they have turned you down. Lenders are not legally obliged to tell applicants why they have been turned down but most will.
Lender's requirements. A lender needs to be as sure as possible that you can handle a loan responsibly and therefore if you have not borrowed money in the past you may find it difficult to get the best rate available. This is because your lack of a borrowing track record makes it hard for the lender to judge how reliable a customer you might be.
If you can show that you are capable of managing your money properly, maybe by having a credit card and a mobile phone and keeping them in good standing then possibly this might bring the best rate loan offers closer to you
One thing you can't be when applying for loan is overstretched financially. Your credit records are there for all lenders to see and they can see immediately what your monthly commitments are and also how you have been handling those commitments. They can also see your credit limits so it's a good idea to cancel any unused credit cards as those low limits could put a lender off you. If other lenders are only allowing a little then why should the new lender have confidence?
Always explain any deficiencies in your credit file. If you have negative entries in your credit file and maybe are having a bad patch financially then it might be better to take some good advice rather than just go out and borrow more money. Missed repayments on your file will remain there for 3 years whilst any bankruptcies, Court Judgements or IVAs will always stay on record for at least 6 years.
If Special circumstances have affected your performance on a finance agreement in the past then explain these circumstances. For instance if you have been ill or had an accident and this affected your earnings and therefore your ability to pay temporarily you can make a note on your credit file and lenders will certainly consider this when looking at you for a loan
If you are having trouble getting a loan make sure you stay away from companies who say they can repair your credit record. Unless a serious mistake has been made on your file this is not possible and if a serious mistake has been made then you can easily repair this yourself. Never fall into the trap of paying for credit repair or debt advice which means rescheduling debts.
Don't borrow money to simply ease your current difficulties. Borrowing more means paying more back and you could be simply adding to your problems. Review your spending first and try to trim any unnecessary spending before simply adding to your debts.
If your credit rating is poor a quick way to improve it is to register on the electoral roll. Lenders use the electoral roll as a precaution against fraudsters. This helps them to prove who you are and where you live. If you are registered as living elsewhere or not registered at all the lender could ask for further proof of residence or could even just refuse you.
Russell is a Financial Adviser in the UK and runs a very busy best rate loans website. If you need a brilliantly low rate loan then please click the link above and apply today. Lowest interest rates guaranteed!