Most clients I deal with have had a bad patch at some point in their financial lives, caused by things like relationship breakdowns, illness, accident, job loss or the like. These life situations can often lead to an actual black mark on your credit file.

black-splatterIn order to avoid loan rejections and unnecessary enquiry listings on your credit file (you get one enquiry listing for each loan application you make online or in person), its a great idea to get regular credit checks before applying for loans. By doing this you will be alerted to any problems on your credit file that need fixing. Ensuring your credit file is clear will mean you won’t be frustrated or delayed when you apply for credit, and can have loans approved as you need them.

If you don’t check your file, and there are black marks on there when you apply for credit, not only will your loan be rejected, but you will also have added another entirely unnecessary enquiry listing to your credit file. Each new enquiry listing that appears lowers your score, making it a bit harder next time you apply for credit, to be approved.

Another essential thing you should consider before applying for credit is whether a lender has an internal black mark against you. This black mark does not appear on your credit file. This happened to a client I helped recently. The client had a completely clear credit file, but had been late with some payments with a particular lender over the life of their overdraft. The client’s broker did not ask the client if they had any issues with particular lenders and put in an application to the same lender that the client had the late payments with. The loan was denied, and the client also ended up with an unnecessary enquiry listing on their credit file that incrementally lowered their score.

So there are two things you need to do/consider before putting in a loan application. The first is to check your credit file prior to putting in a loan application, and fix any issues that are on there. The second is to not apply to lenders you have had issues with in the past, even if they have not blacklisted you. These lenders probably have an internal black mark against you. Avoid that lender when applying for finance.

These simple actions will lead to the best outcomes for you when applying for finance.