Related Credit Card Article

"Avoid black marks on your credit file"

By admin | October 6th, 2008 | Featured

These days getting any form of credit has become more and more difficult, and those with black marks on their credit profiles are likely to suffer more than most when it comes to getting any sort of finance. The number of rejections for finance over recent months has surged as a result of tighter credit conditions and eligibility criteria from lenders, and lenders are looking more closely at credit file information than ever as a result of the current financial climate and the more difficult credit conditions.

Anyone that has black marks on their credit file is likely to be rejected for finance, and this is why it is important to try and avoid getting any sort of blemish on your credit file. According to recent reports in the last eighteen months alone around 3.4 million people have been turned down for a loan or mortgages, and nearly half a million have had to apply four times before finally getting accepted.

Research has been carried out by GE Money, and shows that many people are being affected by the tighter lending criteria that has come into place. Each time someone applies for credit a footprint is left on the credit file, and if the application is rejected this can leave a blemish on the file that will put other lenders off. When lenders see that a person has already been turned down for credit by other lenders they are less likely to take any risks. Likewise, if the lender sees that the applicant has been applying for finance with different lenders in rapid succession it will also put them off and increase the likelihood of rejection.

In order to combat these problems you need to minimise on the risk of being rejected by lenders so that your record is not blemished, and you also need to avoid applying for credit a number of times in a short period, as this makes you look as though you are desperate for credit, and will make lenders think that you are a high risk. In the current financial climate lenders are keen to avoid taking unnecessary risks, so if you look as though you are struggling with credit or you are being turned down regularly then your record is likely to create a snowball effect.

One thing you should always do is check the eligibility criteria of any lender before you apply, as you may find that you are not even eligible, and can therefore avoid being rejected and blemishing your file by not bothering to apply to lenders that do not cater for your needs. There are some comparison sites that will enable you to do a test application to see whether you are likely to be accepted for certain financial products and services, so it is well worth seeing if you can use one of these to avoid damaging your credit before you apply.

Also, bear in mind that if you have held a credit card with a particular company in the last eighteen months and you apply for another offer with the same lender there is a good chance that you will be rejected, so don’t take the chance. In addition to this think carefully about your financial situation before you make an application. For example, if you know that you have made late or missed repayments recently then there is a good chance that you will be rejected for finance, so wait it out rather than rushing into an application whilst your credit is still recovering from your late or missed repayments.

Tags: credit history, late payments, missed payments

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