I can’t get credit! What can I do?
If you are applying for credit and constantly receiving rejection letters – it can be highly frustrating. Lenders will check your credit score before deciding whether to accept your application and if they feel it is below par, they will reject your applications. Quite simply, lenders want to be 100% sure that you can afford to pay it back, otherwise they will be reluctant to allow you access to additional funds. Unfortunately, this means your finances are not in a good state, but there are options available to you. These are some steps you may wish to take if you are frequently getting rejected for credit.
Do you need the credit?
Firstly, it is worth taking the time to work out whether you really need the credit or not. It is often the case that borrowers get themselves in a panic when an unexpected bill arrives and rather than looking at other options, they instantly attempt to get credit. It is important to make use of other options first. For example, your friends or family may be able to help out or you could ask for an extension on the payment date. You should only apply for credit, if you really need it.
Check your report
It may be that you are unsure why you are getting rejected. Maybe you believe your finances are in a good state and are confused as to why you can’t get access to credit. In this case, you should take a look at your credit report. It may be that there are some errors on your file which need to be rectified. The sooner you know where you stand with your credit, the easier it will be to make some changes.
What is the criteria?
When you know your credit score, you will be in a better position to understand your options. Lenders have different criteria when it comes to accepting applications and if your score is below the criteria, there is no point in applying, as you won’t be accepted. Always check the criteria before you make your application.
If you are desperate for some extra funds, it can be very tempting to keep applying for credit, in the hope that someone will accept your application. However, this is the last thing you should do – so, if you are getting rejected, stop applying! Your credit report could be negatively affected every time you are rejected for credit, which means you could make your situation worse, rather than better.
Try a payday loan
Everyone experiences situations when they really need access to funds, but with pay day weeks away, they have no other options. In this case, it may be worth applying for a payday loan. A payday loan gives you access to funds quickly in an emergency and these are a good solution if you urgently need to pay a bill. Payday lenders tend to be a bit more lenient with credit scores than other financial institutions, so can act as a lifeline for many. If you decide to go for this option, just make sure you only take out a loan which you can afford to pay back on your next pay day. The last thing you want is to add more to your debt, so be careful when exploring this option.
Get good at budgeting
The only way to improve your current financial situation is to take a look at your finances. Quite simply, you shouldn’t be spending more than you are bringing in, so careful budgeting is important. If you are getting rejected for credit, it is down to your current situation; but there are always improvements you can make in this area. It is a good idea to sit down and take a look at what you are spending your hard earned cash on, as you are bound to find some ways to make savings. For example, if you are buying takeaways twice during the week, you could make savings by making your own meals instead. Could you walk to work instead of taking public transport? These may seem like small amounts, but over the course of a year, can really add up. The smarter you become with your finances, the more money you will have, which means less need to take out credit.
Boost your score
The only way to start getting accepted for credit is to improve your credit score. It doesn’t matter how low your score is at present, you can improve it. If you have outstanding debt, make arrangements with the lender to pay it back. Take a break from applying for credit until you have made some drastic improvements.