If you are searching for a new credit card or loan, do not submit multiple applications at the same time or you could severely dent your credit score. Applying for any credit card or loan affects your credit rating because the proposed lender will carry out a search on your credit history through one or more of the UK credit referencing agencies, such as Experian or Equifax. That search subsequently appears as an imprint on your credit history file and that ultimately impacts on your credit score.

However, if you have been turned down for a credit card or any other type of borrowing it doesn't necessarily mean that you have become a bad credit risk. It simply means that you didn't fulfil the lender's criteria. That will not be simply based on your credit rating, but will also involve other factors including the target group of that particular lending product; into which you simply did not fit.

Many financial products are designed for a specific target group. That is why APR interest rates on loan products or credit cards are quoted as ‘typical' rates, because they can vary according to an individual's rating. Anyone applying for credit is analysed on an individual basis and information other than just your credit history is taken into account. This could include details of whether you own or rent your home, employment status and details of income; all the information that you would be expected to complete on any lender's application form.

Having a good credit score doesn't mean that you will be considered suitable for all lending products by all lenders. Similarly, if you possess a low credit score it doesn't necessarily mean that you will be denied credit at every turn. There are still certain loans, credit cards and pre-paid cards on the market for which you will be eligible.

So, if you are a young adult about to make your first credit application or whether you are seeking to repair a damaged credit score you will still find lenders and credit card issuers willing to offer you an account. The lending may be at a more expensive rate than other similar products, but you will still get the opportunity to possess a credit card. However, in order to be eligible for the majority of these types of products you must have been a UK resident for at least three months, have a regular income exceeding £10,000 per year and be aged 18 or over.

This article has been written for information and interest purposes only. The information contained within this article is the opinion of the author only, and should not be construed as advice or used to make financial decisions. Expert financial advice should always be sought and any links contained within this article are included for information purposes only.

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