In spite of the frustration of having a loan application rejected, it’s not the end of the world. There are many loan providers out there, and there are some simple steps you can take to improve your chances of getting approved in the future. Here, we explain what to do following several loan applications and how Koyo Loans can potentially help you access the credit you seek.
Do you need a loan?
The likes of credit cards, store credit, and Buy Now, Pay Later agreements are all viable alternatives to loans, depending on what you’re purchasing.
Prior to applying for another loan, consider whether an alternative might be a better option for you if you have had several rejections.
Make sure your credit report is error-free
It is possible that an error on your credit file has led to the unfair rejection of your applications. All three major UK credit bureaus – Experian, Equifax, and TransUnion – keep information about your credit history, which lenders can access upon request.
Even small mistakes can be costly, so it’s really important to check your credit file is accurate and error-free. You can easily apply for a copy of your statutory credit report online. You should notify the credit agency as soon as you notice any errors.
Take into account your eligibility
You must read through the application requirements carefully before submitting an application to all lenders. If you do not meet the eligibility requirements, your application will be rejected – it’s as simple as that. If you are applying for a personal loan with Koyo Loans, you will be required to meet the following eligibility requirements:
You must be at least 21 years old
At least six months’ residency in the UK
Be in good financial standing
No CCJS or bad credit history
Mobile phone owner
Earn a regular income
Self-employment is not permitted
Make sure you consider your eligibility before applying for a loan, and only apply to lenders who will consider your application.
Boost your credit score
The majority of traditional lenders reject credit applications due to a lack of credit history. It is hard to apply for credit if you have missed or made late payments in the past. Fortunately, you can improve your credit score before reapplying.
Be sure to pay all of your bills and credit repayments on time. Make sure you’re registered to vote and that your credit file is error-free (as explained above). It will take several months for your score to improve, but by following these small steps you will increase your chances of getting approved.
Consider an Open Banking lender
In 2018, Open Banking changed the way borrowers were able to access credit and other financial services. Koyo Loans uses Open Banking to evaluate all loan applications based on the borrower’s current financial situation. Using Koyo Loans, you can consolidate your debt for amounts between £1,500 and £10,000. 24.9% APR is representative.
So, when we assess your entire application, we don’t rely solely on your credit score, but also on your incomings and outgoings and whether or not you can afford the proposed loan repayments. Open Banking has improved the quality of products and services available by allowing financial institutions to safely and securely share customer information through APIs.
You need to take some simple steps before submitting a new credit application if you have been denied more than one credit application. Do not fall into the trap of constantly applying for loans without taking the tips introduced above into account because multiple applications in a short period of time will affect your credit score.
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