CCR Magazine, 2nd May 2014, Stable borrowers still rejected for prime rate loans

March loan application data from comparison site Freedom Finance reveals that despite being in full time employment with a median salary of £26,000, many borrowers are still being rejected for the best high street loans.

The data shows that despite a dramatic upsurge in the range of lending products available, the criteria for the very best rates remains strict.

Freedom Finance analysed 9,428 loan applications during March and identified the application details of those who were declined a loan at their requested prime rate:

·        72% were in full-time employment
·        34% were earning more than £30,000 per annum
·        60% were aged 40 or over
·        25% were aged 50 or over
·        46% were looking for a loan to consolidate other debts
·        Average Loan Size requested £10,000
·        27% had no other lending offers

Median profile for consumer declined a prime loan (6% APR):

·        Employment status: employed
·        Median salary: £26,000
·        Median age: 43

Nicola Georgiou, managing director of Freedom Finance, offers advice:

“The lending market has actually opened up in recent months and the conditions have become better for borrowers. The problem is that the top headline rates are only available to the select few with almost perfect credit scores. However, this doesn’t mean that average borrowers can’t still get great deals on loans. Our advice is to be realistic about what you can expect from a loan. For example, if you missed a  repayment last year or have recently changed jobs or moved house, it’s likely that it will have influenced your score.”

Georgiou continues:

“Further good news is that plenty can be done to improve your own credit score. Simple moves like registering to vote, taking out a mobile phone contract rather than pay-as-you-go or staying well away from your credit limit on cards can have a positive impact on your profile. ‘Soft search’ comparison sites are also a valuable tool to help you find the most suitable product, based on your individual credit record, and without making the situation worse.  The ‘hard searches’ used by many lenders can further damage credit scores and can actually make it more difficult to get a loan.”