If you’ve recently found out your loan application has been declined, you may be wondering what to do next. It's important you first understand why your application for a loan was rejected, so you have a better chance next time you apply.
Here are some steps to take if you have been declined a loan.
Why have you been declined?
Before giving you a loan, companies will check your credit report to decide whether they want to lend to you.
If you have a bad credit rating or history of ongoing debts and missed repayments on loans and credit cards, some lenders may think your unreliable and turn you down. A lack of credit history can also put some companies off, as they can't get an idea of what sort of borrower you are. You can check your credit report before applying.
Some loan companies have specific criteria, for example, minimum income - if you don't meet it, they won't lend to you. They may have certain eligibility requirements that you don’t fit. Make sure you check these before you apply.
Another reason for rejection could be a mistake on your application form. Make sure you check all your information is correct before sending anything off, as even the smallest error could impact your chances.
Ask for feedback
Loan companies aren't obligated to give you a detailed explanation of why they declined your loan application, but if you ask, they may tell you what the reason was. This can help you improve in the future or fix any mistakes that may be on your credit report. Order a copy of your credit report and double-check there aren't any errors in your personal information that could be sabotaging your application for a loan. This also gives you a chance to look over your financial situation in full and check you haven't forgotten about any debts or overdue payments.
Don't keep applying
You may be tempted to apply to multiple loan companies at a time to try and land a loan quickly. However, this can be detrimental to your chances of being accepted. Each application will show up on your credit report, and multiple applications in a short space of time will make you look dependent on loans. This can make companies wary of lending to you in case you can't repay them. Instead, research thoroughly and check the criteria until you find a company that suits your needs and is likely to accept you.
Improve your credit report
Unless you need money urgently, it's a good idea to try and build up your credit report before you apply for a loan again. Ensure your details are all updated and correct, work on paying off any ongoing debts or credit cards and make payments on time.
Get free advice
Look into getting some free advice if you feel like you need help handling current debts or finding out how you can get a loan. Your local Citizens Advice Bureau
may be able to point you in the right direction for getting a loan or help create a plan on how you can improve your financial situation as a whole.
About Morses Club
At Morses Club, we want to help you feel a little more in control of your finances, but we understand that unexpected costs can sometimes throw you off course. We are one of the UK's leading providers of cash loans
and consider applications from a range of financial backgrounds.
We will run credit checks and meet with you face to face so we can carry out an affordability check. As a responsible lender
, we try to make sure we only lend to customers who can afford to pay back what they borrow. To find out more about Morses Club cash loans, visit our how it works page