There are a few things in life that are as frustrating as getting declined for Credit. If this has ever happened to you, we know exactly how you feel, but it should not be the end of the world.
Here is why you get declined for Credit!
Over the past two and a half years, we've helped lots of clients qualify for Credit and the number one reason banks and financial institutions decline Credit applications, is a low Credit score.
Does your Credit score meet the minimum requirements?
So what is a good Credit score? Banks generally look for a Credit score of 750 points and above to approve a Credit application as the client with this score or higher, is considered low risk. So if your Credit score is at least 750 points, you are most likely to be approved.
The next category is the medium risk category. You are considered a medium risk if your Credit score falls between 650 to 750 points. The chances of getting approved for Credit, when you fall in this category are 50/50.
Lastly, we have the high risk category. You are considered a high risk if your Credit score is below 650 points and it is highly unlikely that the banks will even consider your Credit application, let alone approve it.
How to get your Credit score up to 750 points and above?
1. Check Your Credit Report - the only way to check your Credit score is to get a copy of your Credit report. Most free Credit reports do not show your Credit score, but ours does, so please get in touch with us to get a free copy of your Credit report. We will even do a free Credit assessment for you and advice you how best to improve your Credit score. If there is any incorrect or negative information on your Credit report, we will dispute this information with the four major Credit Bureaus: Compuscan, Experian, TransUnion and XDS, at a fee, of course :-).
2. Set up payment reminders - if you are anywhere near as normal and human as we are, you will forget to make payments to all your Creditors on time, but this will have a negative effect on your Credit score since making payments on time is one of the biggest contributing factors to your Credit score, so set up a debit order or a reminder to make payments on time.
3. Reduce the amount of debt you owe - This is easier said than done, but reducing the amount that you owe is going to be a far more satisfying achievement than improving your credit score. The first thing you need to do is stop using your credit cards. Use your credit report to make a list of all of your accounts and then go online or check recent statements to determine how much you owe on each account and what interest rate they are charging you. Come up with a payment plan that puts most of your available budget for debt payments towards the highest interest cards first, while maintaining minimum payments on your other accounts.
Please look out for more posts on this topic in the near future and we wish you all the best in your current and future Credit applications :-)
Stop Stressing. Start Living!