Application Declined – Even with a Clear Credit File (or so you think!)

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Application Declined – Even with a Clear Credit File (or so you think!)

Published by img Real Credit Repairers Admin at img March 4, 2016

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Everyday, people get declined for credit applications

It is important to know that it is more than your credit file that is assessed with a credit application

All lenders have different criterias and a default, serious credit infringement, summons/writ or judgement will be the major factor to a declined application. But, if you do not have any of these on your credit file, here are some points to consider:

  1. Too many credit enquires
  2. Do not apply for any type of credit online
  3. Do you fit the basic requirements of a lender’s criteria?
  4. Pay your credit card repayment on time
  5. Is the lender assessing your most recent credit file?
  6. The effects of using payday lenders
  7. A lack of credit history
The above points further explained:
  1. Too many credit enquires – 5 or 6 enquires in the past 12 months can indicate that you may be under financial stress.
    • A common trap that we hear is that when people are preparing to take out a loan, they make enquires to different lenders to see how much they can get and the interest rate. DO NOT DO THIS!
    • Every time you make an enquiry, this can be marked on your file, even if you do not take up the offer.
    • Then when you are ready to take the loan, a lender may deny you because of too many recent enquiries.
    • Avoid “shopping around” to multiple lenders.
  2. Do not apply for any type of credit online. It is easier, but by going into a branch and discussing an application, you will be able to determine the lender’s basis requirements to see if you will be approved.
  3. Before filling out an application, ask any lender whether or not you fit the basic requirements of their lending criteria. This can include employment length, savings, how long you’ve lived in your current address, references and the accuracy of all other information you provided.
    • For example, if a lender’s requirements are that you have been employed with your current company for at least 3 months and you just changed jobs a month ago, DO NOT complete the application. It will more than likely result in a declined application that will still appear on your credit file and make your situation worse.
    • But, if they can guarantee a successful application based on other criteria that outweighs your short employment period, then go for it!
  4. Pay your credit card on time as any payments that is not made within 14 days of the due date, can be reported and listed on your file. Regular late payments indicate a higher credit risk. These entries stay on your file for 2 years. This information is shared between credit lenders.
  5. If you have recently had a default listing removed and go back to a lender where you were previously declined, ensure that the lender is assessing your most recent credit file and not the old one on their system.
  6. The use of payday lenders can also bring down you score
  7. A lack of credit history can also lead to declined applications.
Case Example:

A client employed Real Credit Repairers to remove a court writ and judgement listed on his file (some of the worst listings!). Real Credit Repairers successfully removed the listings but a couple of months later, the client applied for a bank loan and it came back DECLINED! Confused, the client contacted us to question the removal. We were 100% confident in our removals as Real Credit Repairers has all removal successes from the credit providers documented. After contacting the credit reporting bureaus about the matter, it was confirmed that it was removed months ago. We contacted the bank to ensure that they were using a current credit file that did not show the listings and they were. The client was denied their loan due to low funds in their account, a maxed out credit card with late repayments and only starting a new job in the last 6 weeks. In this situation, the client just had to ensure that the credit card repayments were being made on time, they had been in their job for at least 3 months and also ensure that there was some form of funds in their account before applying again.

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