In the last year, a quarter of Brits who applied for a personal loan were rejected. Meanwhile, a third who applied for a credit card were also turned down.
Do you know your credit score?
There are all manner of reasons why an application for credit can be rejected – but research for us* found that last year more than a quarter of Brits avoided applying for products or services where they might be credit checked because they were worried they’d fail. That’s not just mortgages, loans and credit cards, but also mobile phone contracts, rental properties and even jobs that people may have avoided specifically because they were worried about being credit checked.
And a weak credit score isn’t something only people with debt problems have to worry about. It can also affect those who don’t have much of a credit history because they’ve avoided borrowing in the past.
Impress your lenders
Lenders want evidence that you’re able to borrow money and pay it back again - and if you’ve never borrowed, they have no evidence to go on. Similarly, you may have borrowed money in the past, on a store card say, and missed more than a couple of repayments. Even though it’s all paid off now, it may still have left a mark on your rating. However, if you’ve never seen your credit report, how can you know you need to improve it until it’s too late and you’ve already been rejected?
Ocean Finance this week launched Ocean Credit Checker – a service that lets you check your credit report and score, fix any errors and make yourself more attractive to lenders. And it won’t cost you a penny for the first month, as we’re offering a free 30-day trial (fees apply thereafter).
Making yourself more attractive as a borrower is not the only reason to keep an eye on your credit report. It can also signal whether you’ve been a victim of identity fraud. If you spot an application for credit on your report that you haven’t made, it could mean that you’ve fallen victim to a scam that makes it difficult for you to borrow in the future.
As part of the Ocean Credit Checker service, we’ll send you an alert whenever there’s a big change on your credit file – so if it wasn’t you who made it, you can do something about it. To fix an error, just visit the Equifax 24-hour online dispute facility.
Improve your score
So, you’ve signed up to your free 30-day Ocean Credit Checker trial and you’ve discovered that your credit score is not as strong as you’d like. What can you do about it to make sure you’re not one of the people who’s rejected for credit this year?
Update your details – Something as simple as forgetting to update your address on a contract for a phone when you move could result in you being turned down.
Close unused accounts – If you have any credit agreements you no longer use, such as an old store card, make sure you close them.
Correct any errors – If you do spot a mistake, get it sorted before you apply for credit.
Register your current address on the electoral roll – This is one of the main things lenders look for.