Refused credit? Perfect credit score? Here's why!

If you think your credit score is the only thing that determines if you can be accepted for new finance, you have to think again!
By: Solvemybadcredit.co.uk
 
Sept. 19, 2010 - PRLog -- If you think your credit score is the only thing that determines if you can be accepted for new finance, you have to think again! There are many aspects of your credit file that are affecting the decision and can indeed get you into trouble with banks or bad credit.

I am going to cover some really obvious reasons why your loan or credit card application was refused and what you can do about it, how you can better your overall credit rating as well as improving your credit score.

Most lenders do use Experian credit reference agency that collects loads of information about you in a central database. They do sign up for the credit reference agency's services and therefore will see everything about your credit, but even more, all about your life really, and they usually make a decision on your application based on the facts in there. Get a free report here:

Therefore it is very important to know what is in your credit file, if it has been updated correctly and what picture it paints of your financial situation. If it is not satisfactory, you need to work on bettering your credit rating.

1.Lack of credit can be as bad as poor credit history. You might be surprised if you have no credit at all, you can still get declined a finance basically because the agency doesn't even trust you, they don't have experience with you handling your credit. It is always useful to use a little credit or overdraft  and pay it back in time to make up your credit score.
2.Being close to your credit or overdraft limit constantly. If you don't exceed your overdraft or credit card limit, but you are over 75% into it most of the time, that could reduce your credit score. Lenders choose to look into your “reserves” as well, to discover how much credit is available for you at the moment in case you had difficulties paying your new credit.
3.Mobile phone contracts, car insurance. You would not think that these are credits, and you are OK to miss one or two payments, but it is far from the truth. Unless you are paying yearly for the car insurance, it does include an interest, therefore it is credit.
4.Being self employed does not do any good. Especially if you just started a new business with using no previous history, you might be at risk that your credit score is poor. Self employed people are actually a risk for companies, as they could go out of the business any time.
5.Your partner's credit score has influence to yours as well. anybody you are living using and has bad credit might affect your credit rating. To retrieve all the information about this aspect refer to the credit reference agencies.

I advise you to find out if any of the above affairs do apply to you by obtaining a  free credit report from credit reference agencies. It will not only help you retrieve your credit rating but you might reveal potential fraud on your accounts as well.

If you need further explanation on your UK credit report, download our free e-book on the blog! http://www.solvemybadcredit.co.uk/creditreportsexplained.php

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I have seen many people struggle with bad credit in the UK recently. We have to find a solution for eliminating debt and starting a new, debt-free life. http://www.solvemybadcredit.co.uk
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