What to do if you're refused Loans or Credit cards

Refused credit? Don't panic.

Credit of any sort - from Home loans to personal loans and credit cards - has never been handed out freely.

You have to show lenders that you are in control of your finances and are likely to make repayments on time and in full. If you do, you have a much better chance of getting the deals you need.If you are among the people who have been refused credit recently or if you are thinking of applying for credit soon, don't panic. Take action instead.

A good place to start is your credit report from CIBIL, which lists your borrowings and how well you're managing your repayments. It gives you a snapshot of your credit history, what credit accounts you've had in the last few years and how you have coped. Your credit report can also help you to see where you could cut back and whether you could close some accounts altogether. You can see your credit report for INR 470 with CIBIL.

Lenders check it when they decide whether to make you an offer and what terms - such as interest rates - to set. It's crucial that your credit report is up to date and accurately reflects your circumstances, because a better credit history makes you more likely to get a better deal.

For more help, take a look at these top tips.

§         Manage your money. Pay your bills and make repayments on cards, loans and your EMI’s on time. You'll only rack up worse debts, incur penalties and damage your credit rating otherwise.

§          Look at your credit report regularly so you can monitor your progress. Make sure that every entry is correct. A single error could result in a rejected application.

§          Talk to your lenders if you're worried about your debts. They could help you to work out a schedule of repayments you can afford or arrange a temporary payment holiday.

§          Review your spending, set a budget and stick to it. Try to find the best deals on loans, mortgages and credit cards.

§         Don't try to borrow your way out of trouble. You could rack up debts you can't manage and that will mean being rejected for credit you really need in the future.

§         Investigate rolling up several debts into a single, cheaper package, such as a bank loan. There are plenty of financial comparison sites with EMI Calculators that can help you to identify the best option.

§          Look for ways to supplement your income. For example, you could take in a Paying Guest, sell off unwanted electronics or furniture or get a part-time job in the evenings or at weekends.

§         Make sure your partner (husband/wife) doesn't have financial problems. If you have a joint account or have applied for loan with a partner, you will be linked on your credit report. This is known as a financial association and a lender's response to your application may be affected by both credit histories. So get your partner to check his or her credit report, too. If you are no longer financially connected, make sure you get the link broken so that any problems your ex might have don't affect you.

Moneyfinder can help you compare and obtain all kinds of loans, credit cards and Insurance, get in touch with us on 91 8355 955 000 or write to us at info@moneyfinder.in.

Disclaimer - All information in this article is sourced from various websites. This article is compiled by team at Moneyfinder and any content is not owned by us. This information is true as on 08th January 2013.