What is credit?
Your credit rating is the means by which a lender assesses your suitability for finance. They weigh up your previous record with financial arrangements and determine how likely you would be to default on the credit or pay it off in full. It’s essentially a way for lenders to work out profit vs. risk.

Applying for caravan finance
Different lenders work with different criteria so if you’re rejected by one you may still be able to get finance from another.

However, if you do get rejected you should step back and perform some checks before applying again. Multiple rejections can severely harm your future applications for finance, including mortgages.

Before applying for caravan finance it would be wise to check your credit rating files. This can be done via a credit agency, usually for a small fee. Three credit agencies you can do this with are Equifax, Experian and Callcredit.

It’s important to check details as minor discrepancies or oversights could possibly lead to rejection, especially on a big investment like a caravan.

This includes making sure your accounts are up to date and are all tied consistently to the same address and that any old accounts are closed. You should also be aware of any items you have not purchased as this could hint at identity fraud.

If there are any problems or incorrect details you can challenge them and get them changed.

It’s very important to take extreme care when applying. This means reading and re-reading your application form before submitting it. A slight mistake may influence a lender’s decision.

Be careful if you spread out various credit applications as lenders will be able to see if you’re applying for a number of financial products at once and this could obviously affect their decision if they think you may not be able to afford the repayments.

Improving your credit rating
If you have a poor credit rating it may be down to previous missed payments or just a lack of history. By successfully managing phone contracts and bill payments and clearing debts you build up a better credit rating.

However, lenders not only take into account the risk your represent but also the opportunity for them to make profit. If you’re likely to completely pay off your credit prematurely, they might not make enough profit through interest so may reject you.

Small details such as being employed rather than self-employed or providing a landline telephone number rather than a mobile can help. Cancelling old or unused credit cards can help but remember long term bank accounts with a good history are good for your rating.

It’s not the most exciting of subjects but with a small amount of effort you can seriously improve your credit rating and your chances of being successful in applying for caravan finance.

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