There can be several reasons why you can be refused finance, but the most common is because your credit rating is not high enough. This can stop you buying the car or home you want, but can also prevent you from having a mobile phone contract, or opening a bank account. Financial institutions place a lot of faith in credit scores, so here are a few tips on getting finance if you have a poor credit rating.
Make Sure You Are Registered to Vote
You may be wondering what being registered to vote has to do with your ability to get credit. It is because one of the checks carried out is on the electoral roll, to make sure you really do live where you say. If you have not been at a new address long enough to appear on the current register, you will be asked for your previous address so that you can be checked out. No matter what your political beliefs and even if you never actually vote, you must make sure you are registered to do so.
Make Sure Court Records Are Cleared
If you have had a previous bad debt, no matter what the reason, and a judgement was made against you in court, it will be on your credit report. This is true even if you paid the debt as the courts do not generally remove it from their records unless you request them to, and they normally make a very small charge for this. A court judgement can be very unfair if it was because of a dispute, but it will still go against you if you are trying to get finance.
Want to Buy a Car? Look for the Right Finance Company
If you have never taken out credit before, this can be seen as similar to having a bad credit history. Decisions are based on how well you have paid off previous debt, and with nothing prior to go on you will be considered high risk. One way to start building a credit history is with companies like Zoomo Car Credit who do not assume that just because you have never borrowed money before you will automatically default on the payments.
Do You Want a Credit Card?
Credit cards are not always easy to get, but there are some companies who are more prepared to take a risk than others. Court judgements and bankruptcy data stay on your records for six years, but if you go for a card with Aqua, Chrome, Marbles, Capital One and Vanquis, they only take into account these things if they happened in the 12 months before your application. Even the Tesco credit card application only asks about the last 18 months, so all of these lenders will be helping you to improve your credit rating.
Is It A Loan You Are After?
As with credit cards, there are loan companies who are more prepared to take a risk, but be prepared, they will usually charge you a higher rate of interest. However, with companies like Norton Finance and Citrus Loans charging well below 20 percent APR this could be a good way to improve your credit history.
No Official Credit Rating
There is no official credit rating or score; it is up to each company to decide if they want to finance something for you. They all tend to use the same methods of checking you out though, so come up with the same answers. Don’t be put off if you are rejected by one lender, there are others out there who will help you. And, remember that each time you take out a credit agreement and pay it back successfully, this will be added to your file that the credit reference agencies hold. So, the next time a lender looks they will see that you are a good borrower.