The National Credit Regulator – NCR – recently released a report that just over 50% of applications for loans were turned down. This led to a lot of people out there who are wondering why their loans were turned down. Could this have been due to a poor credit score?
Being turned down by a bank can happen to anyone. It’s what you do afterwards that will determine your credit score going forward.
If your loan has been turned down, the first thing to do is to get your credit report.
Think of your credit report as your CV when applying for a job.
The person in HR will look at the CV. This person will only see what is in the CV. They don’t know if the information contained within the SC is correct or not.
So, if there is something wrong in the CV, then you don’t get the job.
The same goes for credit reports. If there is an error on your credit report, the credit provider might turn you down and you won’t get the loan.
READ MORE: Should I take out a personal loan?
Here are some reasons your loan could be turned down:
When you get your credit report, be aware of identity theft, particularly if your loan was turned down unexpectedly.
Check the report for anything suspicious
Check the enquiries on your profile for enquiries from banks or shops that you have not done business with, or worse, accounts open in your name that aren’t yours.
Check for judgements. It can happen that you are unaware of judgements and your credit application will be turned down for an unpaid judgement.
You, or someone guiding you, can find out who the lawyers are and the amounts and payments can be made. Once the judgement amount is paid in full, this will be removed from the bureau.
You have no credit history
If you are a new lender and you have no credit history, the lenders system will not be able to make a decision because there is not enough information, so they will normally be turned done
Here are some ways you can boost a low credit score
If you have been missing payments, making part payments or paying late regularly, your credit score will be low.
But, that is an easy fix.
If it’s late because of late salary payments, then get the debit moved, so that your payments are on time. This includes insurances and phone accounts.
Credit cards give the lender a picture of your spending. If you max out your cards every month, it lowers your score, even if you pay the full amount on time.
If you have a lot of credit cards, and even if the balances on them are low, you have access to a large amount of credit and the size of the credit available is a risk for a potential lender.
Review your credit report and credit score regularly.
You will get an early warning of identity theft, and you will keep control of your personal financial life.
ALSO READ: How to improve your credit score
Want to pull a credit report? Contact RD Debt Counselling and let us help you today.