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Counsellor advises people to use credit rejections to their advantage

Counsellor advises people to use credit rejections to their advantage

• Pay off those credit cards with a remortgage or loan

 

Although being rejected for credit can be detrimental to people's confidence, they should use the experience to improve their chances next time they apply, it has been claimed.

Consumer Credit Counselling Service spokesman Tom Howard has highlighted the fact that being turned down for a loan or credit card does not necessarily mean that all firms will say no.

And borrowers should take on board the reasons that they were rejected to improve their circumstances, he suggested.

Mr Howard said despite the fact that rejections can "dent someone's pride a little," people should apply to find out why they were denied.

He explained: "A bad credit rating is usually caused by defaults on payments, and the more you default the worse your rating gets."

Altering behaviour to stop missing payments could lead to a better chance of being approved for a mortgage or loan.

Meanwhile, in August, personal debt stood at £1,448 billion, according to Credit Action.

Your home may be repossessed if you do not keep up repayments on your mortgage.

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