Despite many banks starting to generate profits again people are still finding it difficult to borrow. Lenders are taking increasingly tough lines when it comes to customers’ credit ratings, reports Times Online. Even minor slips by borrowers are seized upon as an excuse to disqualify potential borrowers, for instance even a single late payments would be enough to jeopardize an application for a loan.
Credit agencies and banks are still taking a very cautious approach, despite the Government’s best efforts to try and ease up lending once again. People who have missed payments for good reasons: illness, holidays or because they were moving homes could have severe knock-on effects to their credit rating and even current borrowing commitments where loans could have their spending limits cut.
Banks do not readily release information about how many applicants are turned down but the credit reference agencies show an insight into the problem. Equifax, a credit reference agency shows a 10% increase in requests for credit reports in the past year, which is down to people constantly having to reapply after being denied and thus re-request credit reports.
This is worrying, as a request for a credit report will leave a footprint on a customer’s credit rating, too many footprints, and you could appear desperate for a loan and be the last kind of customer banks want to offer money to. Simple things can affect a credit rating; Kate Ness from Berkshire cancelled a Vodafone contract within the 14-day cancellation period and sent it back. However, she was startled to find that Vodafone had informed a credit reference agency that she had a credit agreement in arrears, which made it difficult to take out a mortgage.
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