Watch Out For Secured Loan Footprints

Many people are finding that their applications for loans and credit cards are being turned down more often – if you have continuously tried and failed to get credit over the last few months, it might be time to stop altogether.

Every time someone tries to get hold of credit – that might be a secured loan, a credit card, a personal loan or even a mobile phone contract – they are subject to a credit check. the lender will call up the credit reference agencies and they will look at your credit score. If your score – a history of all your past credit agreements – proves that you are a good borrower, then their computers will say yes.

Of course, since the credit crunch, those computers have been reprogrammed to be extra strict in their deliberations. Even the smallest imperfection on a credit score can now lead to your application being turned down as lenders look to limit the amount of money they lend out.

One of these imperfections could be a 'footprint'. A footprint is a record of where you credit score has been checked – every time you agree for a lender to look at the score, it's recorded. This isn't necessarily a bad thing, but if you have 20 checks an only one agreement that tells the lender that you have tried, and failed, for credit many times before.

This sets alarm bells ringing – the lender suddenly becomes suspicious of a potential borrower who has been turned down so many times. It thinks there must be a valid reason for so many other lenders to say no, so it too is likely to also say no.

So the key to credit success is to not keep applying for credit. The less you apply, the less footprints you will make all over your credit score, and the cleaner it looks. This means you should only apply for credit that you are likely to get, and that means taking some professional advice. Talk to your mortgage broker today and see what sort of credit you are liable to able to secure.

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