/ Credit Score And Cards

How many credit applications should you make?

Applying for too much credit at the same time can affect your credit score or credit chances as the more rejections you get the worse it looks on your credit file. Most lenders also have black box criterias that pick up on the rejections on your credit file and instantly refuse you credit. This is why the general rule if thumb is to not apply for any credit within 3 months of a credit application.

As you should know, everytime you make a credit application the mortgage lender will do a credit search. These are hard searches and leave footprints on your credit file. The more you have of this searches in a short period of time, the more your credit score will go down.

These searches can also be seen by other lenders who want to offer you credit. Soft searches on the other hand don't leave footprints which are visible to anyone but you on your credit file.

So why is applying for too much credit bad?

It is bad because you appear desperate to lenders and desperacy indicates you are not thinking properly and could potentially end up not repaying your loan. Whilst this is a bad thing for majority of lenders, there are some lenders that will look to profit from your desperacy and expect you to miss your repayments and default on your loan. This will ofcourse cost you more through fees etc not to mention damage your credit score when they record a default on it.

So how many applications is too many?

Well no one really knows as this is specific to each lender and we don't have access to that information as it is proprietary to the specific lender. The best rule of thumb is to make 1 credit application within 3 months, even if you have been accepted prior.

Negative information such as missed payments, CCJs, bankruptcy etc will stay on your credit record for 6 years whilst other things such as credit searches only stay a year but lenders are really usually interested in activities between 6 and 24 months as this gives a better indication of your present behaviour.

So when is the best time to apply for a loan or credit?

A good financial wellbeing platform will let you know instantly what offers you are eligible for but the general rule of thumb if you are applying without any technology beforehand would be to have a stable job, regular income, not more than 2 debts on your credit file and a history of regular payments towards your debts. Of Course you should not have applied for any loan within 3 months.

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How many credit applications should you make?
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