Why Might You Be Refused Credit?

Posted in News About Loans For People With Bad Credit

There are several reasons why a potential borrower may be refused credit. It’s important to understand the factors that lenders use when assessing applications for a loan or a new credit card. If you understand the criteria used, then even if you have a poor credit score you can take steps to improve your chances of having a loan approved in future, for example through using bad credit loans.

Lenders will look at how an applicant handles their existing credit card account. Perhaps their existing credit card balances are high; this indicates that they are struggling to pay off existing debt. It’s best if you are only using some of the available credit, encouraging a lender to issue a new card. It’s a bad idea to apply for too many credit cards, so reducing applications will ensure that you are not refused credit next time.

Another reason for failing to obtain credit is because your income level is too low. It’s not always possible to find out the minimum income needed for a particular card, but those called “Platinum” will often have a minimum income level. It’s important to read the terms and conditions carefully before applying for these cards, to ensure that you are eligible.

Young people can find it hard to obtain credit when they are just starting out. Lenders like to see that the applicant has a steady job and has been in regular employment for a period of time. It’s important to build up a credit score as early as possible, once you have a regular income to pay off any debts. This will help you apply for further credit in future, for example when wanting to purchase a car or apply for a mortgage. For borrowers with a poor credit score, one option is to research bad credit loans. These products are targetted at people who find it difficult to get credit.

Recommended Posts

Lenders That Consider Applications From People With a Bad Credit Score – Do They Exist?

There are several reasons why a potential borrower may be refused credit. It’s important to understand the factors that lenders use when assessing applications for a loan or a new credit c[...]

Getting The Best Out Of Your Loan

There are several reasons why a potential borrower may be refused credit. It’s important to understand the factors that lenders use when assessing applications for a loan or a new credit c[...]

When Credit Becomes Bad And You Can’t Afford Your Loan

There are several reasons why a potential borrower may be refused credit. It’s important to understand the factors that lenders use when assessing applications for a loan or a new credit c[...]