Loans

[Skithepowder]

If you apply for an unsecured personal loan, never applied for a loan before, have no bad credit ratings or whatsoever and get rejected will that show up on your financial record in the future and hinder your chances of getting a loan from other companies?

[Mrs_Pegasus]

Your record will show that the company has searched your credit history but it will not show if it was accepted or rejected.

If you do have an application rejected, before trying another company I would suggest getting your report from Experian and Equifax to check that there is nothing amiss with it.

[Skithepowder]

So what exactly does a credit history detail and consist of?

[Oneeyedvic]

It consists of the following sections:

1) Whether or not you are on Voters Role and who is on Voters role for the property being searched.

2) Whether you have an alias - ie you have been known by another name or an association - ie someone who is financially associated with you eg spouse / partner / anyone you have applied for credit in a joint name with.

3) CCJ information - This obviously shows whetehr you have any County Court Judgements shown against your name (or any one associated with you)

4) CAIS information - this shows some (but not always all) of your current credit commitments, It is a row of numbers (hopefully '0's) which show how you pay your current commitments. EG:

Loan       24 month agreement  �274

000000100000

This will show that you have a loan which you are paying back at �274 a monthand missed one payment 7 months ago. The numbers can go up to 6 for 6 months behind, an 8 signifies a default. These are sometimes ? which means that the comapny didn't record it properly - usually at the beginning of an agreement.

This is basically how it works

[Oneeyedvic]

The main reasons for not getting accepted for credit are:

1) A 'bad' history ie late payments, close to limits on credit cars, defaults, ccjs etc.

2) Not being on Voters Role - if they can't find you, most finance companies will think you have another address which you are not telling them about which may have a lot of bad data about you

3) No histroy - sounds stupid, but if you have never had any credit before, they don't know how you will pay - most automated lending works on statistics.

 

Try getting a copy of your file from www.experian.co.uk and www.equifax.co.uk as Mrs Pegasus says

[stevie21]

I've always thought that one credit search showing on your file wouldn't go against you but if you applied for a loan and that lender saw that there had been 10 credit searches in the last month they may either assume that
1) You've already applied for lots of other loans and store cards and have more credit than you can realistically afford to pay back
or
2) Every lender in the land is refusing you credit for whatever genuine reason. Why should we be any different?

I wouldn't worry about just the one then.

[gordy_b]

The previous answers are 100% correct and obtaining a copy of your credit file is a good idea.  The lender who declined you should provide you with an enquiry form for the credit reference agency used if you were declined on the basis of bad history.

Speaking from experience in the banking industry, a main reason for declining you for credit is in fact your credit score.  Most companies use credit scoring to determine your eligibility for credit, and all have a "pass mark" you need to get above.  Contributory factors towards your credit score are how long you have lived at your current address, how long you have been in your job, how long you have been with your current bank.

Oneeyedvic advises what I always advise someone appying for credit which is first of all, make sure your name appears on the voters' roll even if you don't vote/intend to vote.