A good credit history is not always a 100% guarantee for obtaining a loan even at times a small personal loan of 5000 pounds or less gets rejected despite having a good credit history. The frustration of being in such a situation is very painful at times when you desperately need credit to cover your finances.

Reasons for rejection

As a standard practice before agreeing to lend credit all banks and other finance providers do a credit check to see your credit score. The credit score helps them identify potential risks involved in lending you credit. Your score is identified by numerous factors such as your earnings, your outgoing expenditures, and your outstanding balances and arrears which is mainly highlighted in your credit report. After an assessment of your credit score the creditors can see why and why not one should be granted a loan. At the start of this article we started by raising a very controversial statement “even a good credit history is not always a 100% guarantee for obtaining a loan”, which is a very common phenomena and there could be many reasons why some people get refused and some of them we have already discussed above. Now there is one more aspect which is quite often neglected and causes a serious problem.

Did you apply many loans recently?

Let’s suppose someone needs 15,000 pounds and to be on the safe side they apply for a few loans, let’s say they apply to 5 different finance providers and every provider offers them 10,000 and they naturally would turn down every and after a few days they apply with more providers and guess what this time they expected a better offer but in fact they will be receiving far below the previous offers even 5,000 loan or less. Such a scenario is quite frustrating and one might seriously wonder why they have been treated this way.I have seen people curse the banks for forming cartels and working together yet claiming to be better than one another. They base their reasoning on the fact that all of the banks are acting in the same way offering them more or less the exact same amounts. Now what actually makes such a thing to occur is again your credit history file, which gets marked every time a finance provider searches for your details and often the name of the company appears on your file which has performed searches previously provides a major clue to the providers who will perform searchers later.The judgments made by the banks and providers is based on the fact that someone who requires a loan has already gone through many other providers and still requires a loan. In this case they either consider the applicant fraudulent or less credit worthy resulting in a decision to offer less or no credit at all at times.

The solution

It is advisable to keep your credit history clear and up to date with all outstanding charging you may incur.In case you apply for a loan do not wait too long, either take combined loans from different providers or just discard the idea of acquiring credit.