How To Improve Your Eligibility For Credit

When you’re looking for a new credit card or a loan, chances are you’re looking for the biggest loan amounts or credit limits, at the lowest interest rates. So why, when you use comparison sites, can’t you see the great offers you’re after? Has there been a mistake? Is the comparison site rubbish? Or, is there something holding you back? Let’s find out.

Why aren’t you seeing the deals you want?

The short answer? It’s not them, it’s you. If you can’t see the kind of 0% interest credit card or large amount loan offers you’re looking for, you’re probably not eligible for them.

We’ll explain.

When you use a comparison site, they take the details you provide them and ping them out to all the lenders they work with. Not all comparison sites work with every lender out there, so it is, of course, possible that you won’t see a card or loan you could be eligible for simply because the comparison site doesn’t have them in their panel.

Once the comparison site has shared your details with the lenders in their panel, each lender will then scan your credit history by doing a soft credit search (the kind that doesn’t affect your credit score) and come back what your approval chances with them are. If your credit history includes things like missed payments, court judgements, high levels of debt or lots of application searches, or even if you don’t have much credit history for lenders to look at, then this can affect how likely you are to be approved, and by how many lenders. But, the results you see do come directly from the lenders – it’s not the comparison site’s best guess at who might accept you.

Some comparison sites will choose to only show you the lenders you have a good chance of being approved with, rather than show you the prize you could have won, as it were. So, if you can’t see a card, lender or specific deal that you were hoping to get, chances are you aren’t very likely to be approved for it.

Improving Your Credit Eligibility

Now you know why you’re not seeing the credit deals you really want, what can you do to make yourself look more appealing to lenders? It doesn’t have to be an impossible mission… but it is a long game. We’ve got ten of the best strategies to help you become a lender’s dream customer. Why not jump right in?

1. Fix errors on your credit report

Have you ever had a proper look at your report, beyond your credit score? Now is a great time to check it out. Lenders judge you based on the information that appears on your credit report – not on your credit score – so if it’s incorrect, that could harm your chances of being accepted. Look for things like typos in your personal details, incorrect loan amounts (if you have outstanding debt) and financial associations that you are no longer connected to. Particularly check for CCJs and defaults that are over six years old as these shouldn’t appear on your credit report anymore – and if they do, it could massively affect your eligibility. 

2. Join the electoral register

Even if you’re not fussed about voting, getting on the electoral register (or electoral roll) is a great way to boost your credit eligibility.  Seeing that you’re registered to vote is important to lenders as it allows them to verify your identity much more easily than if you weren’t, and that lowers the risk of lending to you. Simply following this little tip could make a big difference to your approval chances.  

3. Don’t keep applying for credit

If you’re going from one loan company to the next trying to get approved, it doesn’t look great. Every credit application leaves a mark on your credit report, which lenders can see. If you have lots of them, they might assume you’re desperate for money, and that doesn’t exactly fill them with confidence. So, if you’ve recently been rejected, don’t keep applying! Instead, we suggest taking steps to build a positive credit history, then if you still want or need to apply for credit, try again in 3 months’ time.  

4. Try an eligibility checker

As mentioned above, when you apply for credit, a hard search is marked on your credit report that lenders can see… but if you use an eligibility checker, this doesn’t happen. Eligibility checkers conduct a soft search that only you can see on your credit report, so no matter how many of them you have, they won’t affect a lender’s decision on whether to approve you for credit. It’s a good idea to use an eligibility checker first to get an idea whether you would or wouldn’t be accepted if you submitted an official application. That way, you won’t waste your time or hurt your credit score applying for products you won’t be accepted for.  

5. Get your rent on your report

Did you know your rent payments aren’t automatically included on your credit report? Even if you always pay them on time and in full, it won’t improve your credit score and the lender won’t take this into account when you apply for credit. That is, unless you join a service like Credit Ladder or Canopy. These are independent services that link to your bank account to spot your rent payments going out, then inform the credit reference agencies that you’ve made them. This information can then go towards building your score. It’s a no-brainer!  

6. Take charge of the bills

If you live in a property where all the bills are in someone else’s name, you’re not helping to build your credit history. Lenders want to see you can handle your finances or debt responsibly, and if you prove that, you’ll be rewarded with better credit eligibility. Electricity, gas, broadband and mobile phones are all among the bills that count towards your credit score, so if you feel up to the challenge, get your name on some of them. But, make sure you pay them on time, every time, and in full, otherwise you could do more damage to your eligibility than not being on them at all! 

7. Use a credit card to make necessary purchases

If you’re able to get approved for a credit card, it could be a good tool for building your credit history so that you’re eligible for even more different credit options in the future, as this is another way to show lenders you’re a reliable borrower. But a word of advice: stay within your credit limit, only use the credit card for necessary purchases, not impulse or extravagant ones, and pay off the balance in full and on time every month if you can.  

8. Keep a low credit utilisation rate

Lenders also look at your credit utilisation rate when you apply to borrow more money. This gives them a little insight into your current financial situation. A utilisation rate is how much you’ve spent of your current available limits. For example, if you’ve got a £1,000 limit and spent all of it, you’ve got a 100% utilisation rate and this is a bad sign to lenders as you’ve maxed out one card and are looking to borrow more. It’s recommended you keep your utilisation rate below 30% to show lenders that you’re using credit, but aren’t reliant on it.  

9. Never withdraw cash on a credit card 

This is an important tip if you don’t want to lower your credit score. From a lender’s point of view, only people in dire financial straits would withdraw money from a credit card as it comes with hefty fees and high interest rates. For most people, it’s just not worth it… unless you were desperate for cash. 

10. Wait for big financial mistakes to drop off your report

Things like CCJs and defaults are bad, bad, bad for your score – and some lenders will likely not touch you with a barge pole if you have them in your credit report, as it’s a sign you’ve not paid off previous debts. Unfortunately, these kind of issues will stay on your credit report for six years, and while they do count less towards your score the longer they get, they will still have an impact. It could be worth waiting for these to drop off if you want a significantly better chance of being approved and getting much more favourable interest rates.