Been refused credit from your bank? Before you yell ‘BASTARDS’ at some poor cashier’s face and then apply for eighteen payday loans, read this…
Why have you been refused?
You have a right – to some extent – to know why your loan wasn’t approved. If you were rejected because they searched your credit history and didn’t like what they saw, they have to tell you as much. You also have the right to know what credit agency they used to check you out.
It’s worth asking for a more detailed reason, but they don’t have to give it to you.
Everyone is allowed to access their credit report for just £2 – find out how – and this can go some way to helping you work out what the problem is. But even if your credit report is perfect it doesn’t mean a lender will lend to you – they use their own scoring systems and it’s one of life’s ironies that lenders don’t just look for perfect people who can pay credit back on time. They want to make money out of you, so they’re doing complex calculations based on how much cash they can get out of you.
What if they’ve got it wrong?
This can’t be based on your personal opinion – but if the credit agency they used has mistaken data about you, you’re allowed to put them straight. Write to them ASAP, explaining why they’re wrong and providing evidence if you can. They’ll look into it within 28 days, and that part of your credit report will be marked as ‘disputed’ in the meantime.
Can’t I just apply for a loan with a different bank?
Be careful about this. If you send out lots of applications in a short space of time, it can damage your credit rating even more. You’re sending out the message that you’re desperate for cash. Although you probably are, you have to kind of play the hide-the-desperation game to get lenders to trust you.
What is this credit rating everyone’s on about anyway?
Your credit rating is a score based on how you’ve dealt with credit in the past. Banks and other lenders use this score when deciding to give you credit or not. Odd things like being on the electoral role can affect it. Young people are likely to have low credit scores simply because they haven’t had the opportunity to prove they can handle credit – if you’ve never had a credit card or taken out a loan, how can the bank judge whether you were good at paying off your debts? Read more about how to boost it here.
How else can I get the money?
You’re bound to feel a bit desperate and rejected, but try not to kneejerk into a risky situation. Read our I need to borrow some money article, which talks you through your safest options. And, before you click ‘apply’, it’s worth reading our Can I afford this debt? piece too, to make sure you’re borrowing wisely.
Photo of rejection stamp by Shutterstock
Updated on 29-Sep-2015
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