To help a lender assess your application, it is usual that they will use a form of scoring system to decide whether to accept your application. Different lenders give different levels of importance to your circumstances, and some set a higher pass mark than others.

It is normally based on three core areas:

  • Public record information (e.g. the electoral roll),
  • Credit account information (e.g. records of amounts of loans and your payment history), and
  • Search information (e.g. the number of applications you have made for credit).

This means that care is required to ensure you approach the most suitable lenders, as an application will be recorded as a search (even if unsuccessful) and can then influence other lenders’ decisions.

  • Check your credit file – the information isn’t always accurate and you can ask the agency to correct any inaccuracies
  • Make sure you’re on the electoral register – lenders can be a bit suspicious of anyone not registered to vote
  • Check your address is current on all your credit, bank and mobile phone accounts – you don’t want to give the impression that you have more than one address
  • If you have credit cards you don’t use, close the accounts – having several credit cards can count against you
  • If you’ve never had credit in the past, apply for a credit card so you can build a credit score
  • Make sure you pay all your bills on time

– being only a few days late can result in a default showing on your credit file

  • Never use payday loans – it will make you look like someone who can’t manage money.
Think carefully before securing debt against your home, your home may be repossessed if you do not keep up repayments on your mortgage.