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Published on June 5th, 2013 | by Pete

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Protect your credit report – or run the risk of rejection

Get turned down for a loan and you might feel worried, angry – even embarrassed – but you’re not the only one. According to recent research*, around 7 million applications for credit were rejected last year.

That’s what we found at Debt Advisory Centre when we asked people how their credit rating had affected them in the last 12 months. Taking our findings up to a national level, we estimate that millions of rejection letters get sent out every single year…

Number of applications rejected in 12 months:

• Personal loan 1.6 million
• Credit card 1.2 million
• Overdraft 0.9 million
• Payday loan 0.7 million
• First mortgage 0.6 million
• Remortgage 0.6 million
• Car loan / finance 0.6 million
• Secured loan 0.6 million

As if that wasn’t worrying enough, credit applications aren’t the only thing getting turned down these days. A poor credit rating could stop you opening a bank account, renting an apartment – even getting a job!

You might not expect a credit check when you apply, but it makes sense when you think about it: if you were a landlord, for example, wouldn’t you want to know your tenants were good at paying their bills?

Number of applications rejected in 12 months:

• Bank account 2.3 million
• Mobile phone contract1.8 million
• Rental agreement 1.2 million
• A job 1.1 million
• Home / car insurance 0.9 million

So you should never underestimate the importance of looking after your credit report. Imagine acing a job interview, getting all set to start – then failing on something you probably thought was a technicality.

The good news is, a poor credit rating doesn’t have to stay that way. There are ways to improve it…

Can you improve your credit rating?

• Sign up to the electoral roll, if you haven’t already. It’s quick and simple, but it’ll have a major impact on your ability to borrow.
• Try to budget – and make every payment on time. Even if it’s something you’ve not managed very well in the past, it’s good to show future lenders that you’re on top of your finances these days. Setting up Direct Debits is a great way to make sure you don’t just forget.
• Don’t keep on applying. Too many credit searches on your record in a short period can make rejection more likely.

And finally, take a look at your credit report – it might be better than you thought! Our research revealed that around 9 million people avoid applying for things because they’re worried they’d fail a credit check.

How many of those fears were completely unfounded?

*OnePoll Research carried out a survey of a representative sample of 2,000 UK adults on 2nd May 2013. Figures have been extrapolated to fit ONS 2013 population projections of 50,371,000 UK adults.

Written by: Matthew Plant

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