Credit rating warning over online personal loan applications

Wed, 11 Apr 2007

A financing website has urged people to think about the implications for their credit rating of registering applications for several personal loans online at the same time.

According to a study by financing specialist MoneyExpert, approximately 320 personal loan applications are rejected on average every hour of the day.

Moreover, with 31 of the UK's 89 existing personal loans currently open to online applications, it has issued a warning that people desperate for a loan may choose to apply for several deals simultaneously.

"Loan providers are getting tough so applicants shouldn't assume that, just because the loan is available online, acceptance is automatic," said Sean Gardner, chief executive of the financing website.

"The same rigorous rules apply however you request credit."

Mr Gardner concluded that people who make lots of applications risk developing an adverse credit rating.

Credit ratings, held by the three main credit reference agencies in the UK, are used by financial services providers to calculate the probability that a borrower will repay their debts.

Typically, they are used in personal loan, business loan and mortgage applications.

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