Banks will say ‘no’ to a loan application if they see red flags.
These are five red flags:
Red Flag #1 Stability: residential stability, employment stability, income stability. The ideal is two years or more.
Red Flag #2 Card Churning (transferring a credit card balance to a new card): card churning is a sign of financial distress because the credit card debt is transferred, not paid out.
Red Flag #3 Late Repayments: avoid late payments due to bank glitches by setting up direct debits for loan repayments a day or two before they fall due to.
Red Flag #4 Unpaid Household Debts: late payment of council and water rates, credit cards, utilities (electricity, gas, phone, water) appear as black marks on your personal credit file.
Red Flag #5 Multiple Loan Applications: lenders are suspicious of borrowers ‘shopping around’. Make no more than 3 applications at any one time.
Video link Five Red Flags for borrowers