Why do some lenders decline my loan applications?

Having an application for a credit product turned down can be quite disconcerting. It can even be almost insulting, as someone is saying that you are not 'good enough' for them. But it isn't really like that, because it can be time specific. Being turned down for a loan means simply that, on a specific occasion, and from the point of considering all of the information available, the loan provider feels that they are unable to offer you credit. This could be because your credit score is below the acceptable 'cut-off' score, or maybe they feel that at this time you would have problems meeting the repayments on the loan. This could be because you've just changed jobs or have just moved home. Even if you are earning a lot of money, it's just not that simple.

The lender that turns you down is not saying that you are a bad payer. They're not even suggesting that they have seen information detrimental to your financial affairs. What it does mean is that the experience of the lender is that applicants who have been in similar circumstances to you have had a higher likelihood of experiencing payment problems. There is not usually only one reason why your application has been refused based on credit scoring, as so many details are used for scoring. This explains why it is very difficult to be specific about the reasons for failing a credit score. Product providers do realize that being refused can be upsetting to people, but they also reserve their right to decline applications.

Some people are surprised in particular when they are turned down for a credit application even though they have other credit products, which they are managing perfectly sensibly. Product providers feel sometimes that those with a lot of credit products may eventually encounter problems with increasing repayment obligations. They also realize that customer circumstances change over time. Thus they may choose not to offer you additional credit.

Should you feel that the decision not to give you credit is not fair, most product providers will reconsider their decision, should you be able to provide additional information which supports your application. In this event, you should write to the product provider, supplying that relevant information and explaining why you feel their decision is wrong. Bank statements should help you, and you should especially send off for your credit reference file from Experian or Equifax.

Circumstances change over time, so you can re-apply. Product providers are unlikely to refuse a re-application just because they have declined one previously. But if your circumstances haven't changed or you can't provide new information, then don't expect their decision to change.

Remember that all lenders have different lending policies and assessment rules, so try others.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

© AskFinancially.com 2008

Loans

Ask About

> Loans Advice
> What is a personal loan?
> What is a secured personal loan?
> What is an unsecured personal loan?
> Do companies specialize in student loans?
> What is the difference between a bank loan and a personal loan?
> Will I be able to get a loan if I have bad credit?
> I need to consolidate my debts, is it advisable to get a consolidation loan?
> What is a bridging loan?
> How do I find the cheapest rate for loans?
> How do I find a low interest loan?
> What is a career development loan?
> I am a tenant, how am I able to get a personal loan?
> What is a home improvement loan?
> Can I take out payment protection on the loan?
> Is Payment Protection Insurance Suitable for me?
> Can I claim on PPP if I am suffering from stress or mental illness?
> What is the difference between a mortgage and a loan?
> What is a business loan?
> How are Business Loans structured?
> Should I get a Small Business Loan?
> What is a home equity loan?
> What are the tax laws on UK loan interest?
> How do I get an online loan?
> What kinds of loan company can I find?
> What is a Flexible Loan?
> How do I apply for a loan?
> How do I get a fast loan?
> How do I get an easy loan?
> How do I use a loan calculator?
> How do I get a fast cash loan?
> How is my loan rate calculated?
> How do I compare APRs?
> What is credit scoring?
> Why do some lenders decline my loan applications?
> What is a credit reference agency?
> What do I do if credit reference agency information stops me getting credit?
> What do I do if I get into loan repayment Difficulties?
> What are the alternatives to taking out a loan?
> What are the different types of loan interest?
> What are car loans