Why am I being refused credit?
March 1, 2013
According to recent research from the Office of National Statistics (ONS), Scotland has the lowest level of personal financial debt in the UK. However, many Scottish residents are still turning to credit to pay the bills.
Having a credit application declined can be disheartening, but it’s important not to panic. There could be many reasons which could easily be resolved and further applications for credit aren’t necessarily the answer. In fact, multiple refusals will leave a trace on your credit score, which will be detrimental to your credit rating.
Every time credit is approved, there’s a possibility it won’t be repaid. Because of this, lenders take necessary steps to ensure they only provide credit to those who pose a satisfactory risk.
The Consumer Credit Act 1974 provides regulations for credit providers and explains the rights of applicants. If you are refused credit, as an applicant, you have a right to the name and address of the credit reference agency where the information was requested. You do not have an automatic right to the reason why you were refused, however, the lender is obliged at least to give you an indication.
Once you know, broadly why you were refused, you can address the problem. Often, you can provide evidence to contend the credit providers’ decision. If you are still refused, options such as registering on the electoral roll or checking your credit report are other ways in which to assess and improve your credit situation.
If you’re already defaulting on current payments, then you won’t be a desirable candidate for lenders and it’s best to get independent professional advice to consider a suitable debt solution before taking out more credit. Our experienced team at Scotland Debt Solutions can offer impartial advice on the best debt solution to support you. Often getting these debts under control is all that’s required to repair your credit rating.
Perhaps you’ve never taken out any credit. This results in you having no credit rating. If you’ve never requested credit, lenders don’t know whether you can manage the repayments, and therefore are reluctant to lend. In this scenario, you need to apply for credit suitable for people with a low credit score.
Some credit cards are specifically built for those with a low credit rating: for example, store cards often accept applicants when credit cards won’t. Regularly paying off a store card balance in full can prove to credit providers that you’re able to handle repayments and in turn improve your credit score. However, be careful to choose the right card for this purpose, as store card interest rates are typically quite high. It’s important to obtain specialist advice if you’re unsure, to assess whether this option is suitable.
Once you’re confident your credit rating has been improved you will hopefully be in a position to successfully apply for credit a second time. Why not call Scotland Debt Solutions today to discuss your credit rating and our friendly, approachable consultants can offer expert advice on your current situation.
The start of a new year is the perfect time to take stock of your finances and put plans in place for a financially savvy year ahead. While you may feel your problems are insurmountable, there are always things you can do to help, most of them surprisingly easy. Here are 7 ways you can […]
If you have credit card debt which is attracting a high level of interest, moving this balance onto a lower interest card could save you a considerable amount of money. This process is known as a ‘balance transfer’, and if done correctly, this process could save you money and also reduce the time it takes […]
Many thousands of young Brits are being actively encouraged towards taking on debt and spending borrowed money even before they reach their 18th birthdays. That’s according to the price comparison website comparethemarket.com, whose research suggests that roughly one in four 16 and 17 year olds in the UK have been offered credit cards or asked […]
If you’re in serious debt with no hope of repaying your unsecured creditors, you don’t have to wait for a creditor to take legal action against you. You may be able to take matters into your own hands and apply for sequestration (bankruptcy in Scotland). This also prevents your situation from worsening. There are two […]
If you’re looking to save some money it’s a good idea to make a detailed budget that lets you see where your cash is currently being spent, and offers an overall view of your finances. You’ll need to collect together your income and expenditure details, including annual costs such as insurance, car expenses, birthdays and […]
Scotland has a number of formal debt solutions that can help you deal with a difficult financial situation. It’s advisable to take action as soon as possible, however, to prevent your levels of debt escalating when interest and other charges are added. Obtaining professional advice is key in this respect. An approved money advisor or […]
Why Choose Us?
- Speak direct with a qualified adviser
- We do not operate call centres
- 4 Offices in Scotland - National Coverage
- Home visits also available
- Fully regulated advisers and Reputable Firm
- Helping Scots Get Out of Debt Since 1989