Will my credit score impact my loan application?
As we’ve said before, individuals don’t have one universal credit rating. However, your loan provider will use their own scoring system to predict how likely you are to be a good customer.
As every lender has their own scoring system, there’s no real way to know why you may be deemed a good applicant by one lender, or why you may pose more of a risk to another.
Even though the credit score you see online might be good, your current circumstances might not always be a suitable fit for all finance products.
The best example here is low-rate APR loans. More applicants typically get declined for this type of product. Lenders will only offer the very best rates to customers with the lowest level of risk, as these customers are most likely to be able to pay the loan off reliably. As only a small percentage of customers will be offered the best rate for this product, accept rates may be lower and other higher rates may be offered to customers who don’t meet the stringent scoring criteria.
Yes, it’s correct that providers must offer the Representative APR to at least 51% of customers, but it’s worth keeping in mind that this only applies to 51% of accepted applicants.
It may be more likely a larger percentage of customers will be accepted for credit products such as credit cards or high-APR loans, for example. This is because lenders allow more people to access credit, but this can be costly for the customer and you could end up paying higher interest rates.