You don’t have to have a 100% perfect credit history to be eligible to borrow money.

Being able to borrow money on a personal loan can make so many things in life possible; it can allow you to secure a decent home by providing the deposit on a rental property. It can allow you to buy a new car so you can accept that better job you’ve been offered out of town.

Alongside learning how to save each month, living within your means and understanding how to make your money work for you, borrowing intelligently is one of the key elements of financial literacy for all of us. If you’ve had some issues in the past with personal loan applications, that doesn’t have to dictate your future course, because it’salmost always possible to improve your hit rate when looking for a personal loan.

So what are the common problems that result in people being turned down for a loan? Let’s take a look…

Problem: Applying to a lender you’ve never been a customer with before.

Solution: Ask your existing bank. If you’ve banked with your current bank for 10 years, for example, then you have an established relationship and borrowing history with that business. This could increase the chances of getting accepted for a loan, particularly if you already have other debts with the same bank that you’ve serviced well. Your current bank may not offer the lowest interest rates on the market but they may be the only ones to offer you a loan at all.

Problem: The lender declined to lend to you on the basis of your credit history.

Solution: Find a guarantor. A less than impressive credit history doesn’t have to stand in the way of access to a personal loan but can affect your capability to borrow even when you have resolved the bad credit issue. Guarantor loans provide a lender with reassurance so give anyone the chance to borrow. If you’re not able to make the loan repayments to the lender then your guarantor promises to do it instead – this is usually a parent or other family member. It’s amazing how many doors will suddenly open when you’re not making an application on your own – just make sure your guarantor understands the risks they personally are taking.

Problem: You just keep getting turned down at the first hurdle and don’t really know why.

Solution: Look at your credit score.They are not everything in a loan application but credit scores certainly have a big impact, although there are plenty of loans for people with bad credit scores. If you haven’t had much success in the past it might be worth taking a fresh look at your credit score to see what you can change. For example, is your credit history correct – it’s not unheard of for credit reports to contain the kind of mistake that could result in you being turned down for a loan. These can be fixed to increase your chances of success next time around. If you’re having zero luck with your applications the first place to start is by checking all your data is correct.