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Credit Crisis - Can I Still Get A Loan?

Jul 11, 2008
Although it's important to research the loan market thoroughly make sure you don't make multiple full scale applications at this time. Each loan you apply for will cause a record to be placed on your credit report and this can seem to a new lender that other lenders have been turning you down. This can very easily influence the decision of the new lender and you could find yourself turned down for no other reason than those multiple applications on your file.

The best way forward then is to try and get loan agreements in principle without having the full credit search. Then compare whats on the table and apply for the loan that bests suits your needs. If a lender turns you down then you MUST find out why. Lenders are not required by law to tell you why you were refused but in reality most lenders will give their reasons. It is vital to get the reason for refusal and check the reason is valid before you consider applying for another loan.

What are lenders looking for? Obviously it's very important to the lender that you should handle the repayments of your loan and if you have been largely credit free in the past you might find it difficult to get the best rate for your loan. The only way a lender can judge your ability and attitude towards repaying loans is your credit track record so although you might think because you haven't been borrowing regularly you're a good bet the lender might not see it that way.

It's a good idea to get a credit card and run it for a while responsibly for a while and also a mobile phone. Once you establish some track record the best rate loans may come within reach.

It's important not to be overstretched when looking for a new loan (and maybe more important not to appear to be overstretched!). Lenders will always look at your credit record to see what you have outstanding in loans, mortgages etc and they immediately see how you are handling your current payments. If you have idle credit cards then it's a good idea to close those accounts as lenders may get nervous about your spending suddenly getting out of hand if you have instant easy access to more money.

Always explain any deficiencies in your credit file. If you have negative entries in your credit file and maybe are having a bad patch financially then it might be better to take some good advice rather than just go out and borrow more money. Missed repayments on your file will remain there for 3 years whilst any bankruptcies, Court Judgements or IVAs will always stay on record for at least 6 years.

Always explain if you have had a problem due to special circumstances. If you have been ill for example and it affected your earnings then you can add this information to your credit report and most lenders will probably take this into account when considering your application.

There are companies out there claiming they can repair your credit report. Stay away from these companies. Repairing your credit report is not possible unless someone made a mistake. If a mistake was made then you can repair your credit report yourself easily sp beware of these shysters, you will only end up being more out of pockets for something that simply isn't possible.

If you struggle getting credit, the first step is to review your spending and if you are having problems with your debts then get advice from a debt counselling service .

Lenders use the electoral roll to check on applicants so if you're not on the electoral role then do so immediately. This give you more credibility with lenders and they have more faith in the fact that you are who you say you are. If you are not registered on the electoral roll or possibly registered as living elsewhere you will have extra questions to answer and could face the risk of being summarily refused the loan.
About the Author
Russell is a Financial Adviser in the UK and owner of a extremely popular cheapest rate loans website. If you require a low rate loan then please click the link above and apply today. Lowest interest rates guaranteed!
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