With the current flood of adverts claiming how simple it is to get or any other line of credit, it's easy to believe that anyone can be approved, regardless of their circumstances.
However, this is not the case, more often than not.
Even if applicants are approved for a certain line of credit - such as a credit card, or personal loans - the advertised rate of interest may not be the one that they are offered.
Why your credit rating is so important
As you may already be aware, all adults in the UK have their own unique credit rating. This is what lenders use to determine whether or not they will approve applications for credit and if so, at what rate.
Therefore, if your credit rating is less than perfect, you may find yourself being denied that new "super loan rate loan". Even if you are approved, you probably wont get the "low rate" you were expecting.
So what should you do?
As it happens, there are quite a few steps that can be taken to improve your credit rating, ensuring you get the loan you want - and at the low rate advertised.
There is no such thing as a "quick fix". However, a mix of the following methods will certainly help.
The electoral roll
If you are not on it already, make sure you are on the electoral register. If you're not "on the roll", your chances of getting credit are much more limited, as lenders want to know exactly where you live. Giving your local council a call should clear any electoral issues up.
If you are not eligible to vote, sometimes the case if you are a foreign national, you will need to send each of the credit agencies proof of your residence.
Timely applications
Multiple applications over a short period of time will have a negative affect on your credit rating.
Yet after being rejected by one lender, many would-be borrowers immediately make applications to another, and another and so on. This is know as the "rejection spiral" and can be avoided in two ways.
First, space out any applications over a period of a few weeks or months. Second, remember that credit applications aren't just limited to loans or credit cards: they can be linked to mobile phone contracts, even car insurance, where you ask to pay for your cover by instalments.
Watch your footprints
Every time you make an application for credit, lenders make a note of this on your report. This is known as a "footprint", and remains on your report for a year. There can either be "hard footprints" or "soft footprints".
A "hard footprint" is a "credit application search", and these are the ones to watch out for. If you are simply shopping around for the best deal, then you want to make sure that lenders are only making a "quotation search", which will leave a "soft footprint".
