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When doing research for a loan make sure you don’t actually apply for several loans at one time. This is because, if you make several full scale applications, these will leave a credit search record on your credit file. Multiple applications often indicate multiple refusals, so new lenders looking at these records will probably assume that other lenders have turned you down and may follow suit.

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 lenders look out for. Lenders need to know you can handle credit therefore if you have never borrowed money before you may not be offered the best rate. You may believe you are a worthy customer deserving of the best loan but you can’t seem to get it simply because you have no track record.

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.

One thing you can’t be when applying for loan is overstretched financially. Your credit records are there for all lenders to see and they can see immediately what your monthly commitments are and also how you have been handling those commitments. They can also see your credit limits so it’s a good idea to cancel any unused credit cards as those low limits could put a lender off you. If other lenders are only allowing a little then why should the new lender have confidence?

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.

If you are having trouble getting a loan make sure you stay away from companies who say they can repair your credit record. Unless a serious mistake has been made on your file this is not possible and if a serious mistake has been made then you can easily repair this yourself. Never fall into the trap of paying for credit repair or debt advice which means rescheduling debts.

There is usually a good reason for credit being refused to you. If you are struggling financially then the wisest step is first of all to review your spending. A good mover could be to consult with a debt councilling service.

One very simple and quick way to improve your credit rating is to register on the electoral roll if you aren’t on it already. Credit reference agency Experian tells us that lenders use the electoral roll as a precaution against fraud, to help check that you are who you say who you are and live where you claim to live. If you are registered at a different address to the one on the application form, or don’t appear on the electoral roll at all, they may ask for proof of residence or could simply turn you down.

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