Lenders have to make sure you can afford to repay without falling behind on bills or borrowing more. The checks should be “proportionate”: more borrowing, more expensive borrowing or more frequent borrowing all mean the lender should look harder.
Red flags a lender should have spotted
- Repeat borrowing. Taking a new loan soon after repaying the last, especially if the amounts went up.
- Borrowing to repay borrowing. Using one loan or card to pay another.
- Lots of lenders at once. A credit file showing several high-cost loans at the same time.
- Missed payments and defaults. On their own account or elsewhere.
- Limit increases while struggling. Card or catalogue limits going up while you were only making minimum payments.
- Gambling or bounced payments visible on bank statements the lender asked for.
What to do
Write down which lenders you used and roughly when. Then either complain yourself for free or do our free check to be introduced to a regulated firm.
If the lender says no, or doesn’t reply within 8 weeks, you can go to the Financial Ombudsman Service for free.