By Matt Fernell, Editor at Finance.co.uk. Last updated 1st May 2024.
Applying for borrowing products leaves a mark on your credit file. It's best not to submit too many credit applications at once, but you can still shop around.
A credit application is when you apply for any form of credit, such as:
Your potential bank or lender will ask for your consent to run a credit check as part of the application process.
Before you apply for any type of credit, it's good to check your credit file to ensure that all the information is accurate, up-to-date, and free of errors. Some of the mistakes that you need to look out for are:
Your credit report will contain information about your financial history. This comes from banks, credit card companies and building societies you have borrowed money from in the past or currently owe to. There will also be information from publicly available sources, from your mobile phone provider and others. Your report is likely to have the following information:
When a lender obtains your credit record, they will review how you handle your finances. Each credit check is recorded on your credit report, whether you get accepted or rejected.
Every credit application you've made will be visible to the next lender or creditor you apply to. They can see if you've been rejected or approved before.
Lastly, by making numerous applications over a short time, it could appear to lenders that you are desperate for a loan or credit, which unfortunately may decrease the likelihood they will lend to you.
The information provided does not constitute financial advice, it’s always important to do your own research to ensure a financial product is right for your circumstances. If you’re unsure you should contact an independent financial advisor.
