What to lenders want? If you’ve applied for credit and been knocked back – why?
Well, just like a bad date, the lender in question doesn’t have to tell you why they turned you down. And, also like with a bad date, it could be a case of ‘it’s not you, it’s them’.
The thing is, while what one person is looking for in the perfect date another is totally turned off by, every lender has its own criteria when it comes to borrowers. Just because you’ve been knocked back by one, it doesn’t mean you’ll be rejected by them all.
But not knowing what specific lenders want isn’t helpful to you right now. So, we’re here to share what most will take an interest in when you apply:
Yep! Your home is of real interest to lenders – not that they’ll pop by for a brew as part of your application!
It makes sense really, though. If you’re a homeowner, it suggests that you have borrowed before and can be trusted to manage credit. It also suggests you’re fairly settled at your address.
And similarly, if you rent your home, being settled at one address is likely to be more attractive to lenders than a history of moving around a lot.
But if, on the other hand, you live with your parents, lenders might be concerned that there’s nothing holding you there. This lack of stability may put them off.
What you can afford
Lenders will also consider whether you can actually afford to make your repayments if you borrow from them. To do this, they’ll ask you about your income and job – and they may ask for proof in the form of payslips too.
If you’ve recently got a new job, this is something lenders may consider too – although every case is different. For example, if you’re switching from part-time to full-time, this could work in your favour. But if you’ve quit your career as a surgeon to open your own balloon modelling business, well – you do the math.
What’s your record?
Do you live for payday? Do you regularly borrow to make ends meet? Have you missed your mobile phone or utility payments? If this sounds like you, be warned that it’s behaviour that can put lenders off.
Obviously, real life isn’t simple and you may have had to abandon a bill payment one month because you were off work ill or going through a break-up. No matter what the reason, some lenders will automatically reject your application if you’ve missed a payment recently – but not all of them will.
"Lenders don’t all have the same taste in borrowers."
As we said. It all comes down to the lender. We don’t all have the same taste in guys and girls (if we did, George Clooney would be the only man to regularly land dates – and he’s taken), and lenders don’t all have the same taste in borrowers.
Just use the above as a guide, and see if there’s anything you can do to make yourself more attractive to more lenders.
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Intelligent Lending Ltd (Credit Broker). Capital One is the exclusive lender.