When Applying for a Loan is a Bad Thing

It is often said that applying for a loan can be a bad thing, but is this true and why?

The reason people say this is that when you make too many applications, especially with the worst kind of lender, your credit score can be reduced. As a general rule, making more than 5 applications in 6 months would start to be bad for your next finance application.

On the other side of the coin, if you apply for a loan, say a car loan and make every repayment on time. then that can be good for your chances of getting a loan in the future, so it is not always clear cut.

Below is a table to show the worst to best of credit inquires for your credit file.

green to red - Copy

Remember, any of the above application types can be bad for your credit file if you make multiple inquires, so make it count! If you get a decline, contact us so we can give you an assessment which does not affect your credit file.

To get an assessment, complete your details by clicking here.

If you want to find out how to fix your credit file, click here.