Each time a consumer makes the decision to apply for a loan a record of the search remains on a personal credit report for a period of 12 months. If too many loan applications are made, it will set off alarm bells with lenders. It is imperative that a borrower checks their credit report, is realistic about their repayment history and then opts to apply for a loan that has a greater chance of being accepted.
Credit Rating Checks
Any consumer that wishes to make a loan application should order a copy of their credit report prior to getting a credit rating check. A copy can be attained from credit reference agencies, such as Experian, for just £2. This allows a borrower to scan their credit history for errors. Any erroneous data held can be challenged and removed, although this takes several weeks to achieve in practice.
The Electoral Register and Loan Applications
Only apply for a loan when once showing on the electoral register; this part of the search is a fundamental part of the overall credit rating check. A secured or unsecured loan application is vastly more likely to be accepted once the borrower is registered as it allows the lender to be sure that the borrower genuinely does live at that address.
Loan Applications for Consumers with a Good Credit Rating
A credit rating check holds no perils for consumers with a good credit rating. Always use a price comparison site, such as moneysupermarket.com, to trawl the market for the most competitive deals. Apply for a loan that offers the most attractive terms; never apply for multiple loans at the same time as it is likely that all applications will be rejected.
Where to Apply for a Loan with a Bad Credit Rating
Missed or late payments will mean a bad credit rating. It is important to know where to apply for a loan as applications to mainstream lenders will be rejected. Unsecured loans are available from adverse credit lenders, such as providentpersonalcredit.com. Pawnbroker loans, logbook loans, payday loans and Credit Union loans are other options. The interest rate charged will reflect the risk posed to the lender. Provided sufficient equity is available, a secured loan may offer homeowners more attractive terms.
Consumers wishing to apply for a loan should always order a copy of their credit report prior to getting a credit rating check. Loan applications from bad credit rating applicants should rarely be made to mainstream lenders as missed or late payments will result in an automatic decline. Whilst a secured loan is more likely to be accepted, borrowers should be aware of the greater risks involved.