Whether it’s buying a home, going on holiday or clearing your debts – some people need that extra bit of help from the bank to raise some finance, but it can be utterly disappointing when that help gets turned down. Studies have shown that many Brits across the UK are uncertain as to why they are refused credit from their bank. Here are four reasons as to why you might have been refused:
Poor Credit Rating
Your credit rating is the first piece of information a lender will look into when making a final decision to lend, and if you have been refused credit, a poor credit rating might have been the reason why. If your credit isn’t great, look for ways to rebuild your credit. A poor credit rating can be caused by:
- Late or missed payments
- Applying for multiple applications
- Cancelling old credit cards
- Gambling
- Defaulting on a previous loan
- Entering into a Trust Deed or IVA
As it turns out, you can lose up to 160 points on your credit rating by missing a payment, so make sure you keep up with your monthly bills!
Not enough Income
Lenders will be hesitant to offer you a loan if you do not have enough coming in each month. If this is the case, look for ways to increase your income for example get a part time job, cut down on your spending, shop around for cheaper energy bills and so on.
Plus, if your income is low due to paying back existing debts, this can sway the lender away from you as they may believe that you will not have enough money to afford the repayments.
If you are really struggling to keep up with your repayments, we highly suggest that you speak to one of our advisors here at Basik Money, where you can get free impartial advice on how to clear your debts.
Linked Credit Reports
This basically means that your credit report is linked to someone who has a poor credit history, which is another reason why you might have been refused credit by your bank. This could be your current or ex-partner, usually due to having a joint mortgage.
If you are still with your partner, help them find ways to improve their credit rating. However, if it’s an ex-partner, you will need to get a dissociation to rid the link.
Not Registered to Vote
If you are not on the electoral register, it can weaken your credit rating. This may seem unfair, but lenders check to see that you appear on the list to make sure that you are who you say you are. Questions will arise if your name does not appear on the list, as the lender may believe that your application may be fraudulent.
If you are not on the electoral roll, you might want to consider adding your name to the list, as it can boost your credit rating by 50 points.
Remember: you do not have to vote once you have been registered. Voting does not affect your credit rating, but not being registered does.
What you can do!
If you are looking to raise some finance and are struggling to do so through your bank, get in touch with Basik Money today on 0330 041 2299 for a free impartial chat with one of our qualified advisors. We search the entire market, ensuring that you have the best chance of acceptance for the finance option that is right for you.
