Customers making multiple UK loan applications can seem hopeless to UK lenders.

Because when assessing each loan application, each lender will look up the applicant’s address and 6-digit UK postcode using “credit reference agency” services.

There are three main credit reference agencies used by lenders in the UK: Experian, Equifax and Callcredit PLC.

These agencies collect information from lenders about your credit agreements (loan and credit/store cards) (including late payments), as well as county court (CCJ) judgments and voter (voter) registration information.

They check the UK voter roll to confirm that someone over the age of 18 with your name has registered to vote at the address you provided on your application for the number of years/months you have declared living there.

A lender can only provide information about your credit agreements to Experian, Equifax and Callcredit plc etc. with your consent.

The ‘fine print’ in your credit agreement generally ensures that you give this consent when you sign it.

But if they do not obtain your consent to share your information, they are in breach of the UK Data Protection Act 1998, and this may make your credit agreement unenforceable without a court order.

The results of credit reference agency searches, along with the details of the loan being requested, are used by lenders to create a “credit score” that forecasts the likelihood/risk that the loan applicant will or will not meet their loan. loan obligations in case the loan is granted.

Credit scores are also increasingly being used to set the interest rate a loan will carry. – the higher the risk perceived by the lender, the higher the interest rate the borrower will pay.

As well as checking whether the person is registered on the UK voter roll at the address they provided on their application, and whether their payments to other loan companies and credit cards are up to date, these services reveal how many other loan companies They have searched for the same person at the same address for the past few months.

At the time of writing, the author believes that search information is kept on file for 12 months at Experian and up to 2 years at Equifax and Callcredit.

Thus, the person who applies to several companies in the hope of securing at least one loan offer may, to whoever is evaluating his or her loan application, appear to be someone who might have been turned down by each of the other companies at the same time. the ones you requested.

Which means that multiple loan applications typically receive a significantly worse credit score than applications where it appears that the applicant has only made this one application.

Many UK lenders also sign up for other smart (anti-fraud) services with these UK credit reference agencies, which compare the information applicants provide to different loan companies.

It is therefore vitally important to ensure that if you apply for more than 1 company, the information you fill in on each application form about how long it has been at your address, with your employer, with your bank… etc truthful and consistent in all applications for loans and credit cards you make in the UK.

Because if not, even a small and honest inconsistency could cost you a few points on your UK credit score, which in itself could make the difference between being offered the best interest rate from the UK lender or not accept it for the loan.

Without a doubt, the best strategy is to spend your time properly researching UK loans and UK credit card offers and planning your approach before applying.

Then you have to be very careful and organized with each application you make to make sure it is absolutely consistent and accurate every time.

Whatever you do, don’t bombard every UK lender you can find with an application, although the internet makes this all too easy to do.

Apply to only one or two companies at first that offer the best offer you want to be accepted for (being realistic about the size of the facility you’re applying for) and then give them time to evaluate your application before you approach any other lenders. .