In times gone by, bankruptcy was a major social stigma and spelled the death knell for individuals and businesses, in so far as reputation and future credit went. It was a matter of honour for many. You had to be at rock bottom financially with very little option but to declare yourself a bankrupt and all that it entailed.

Sometimes you get turned down because you don’t have a credit history. Additionally, you may have just arrived in the country or you have never applied for a loan before and you have paid your bills on time every time. The reason you are usually turned though is because your credit rating isn’t good enough or there have been too many entries or notations on your credit rating file.

A credit rating is held by credit rating agencies on every one of us who apply for loans and credit. There are no formulas to calculate your credit rating. Every time you apply for a loan, the lender asks the agency about your credit rating and based on the content of your file, the agency will provide an evaluation report to them about your credit risk.

If you have entries such as default of payments from previous loans or you are and existing bankrupt or a discharged bankrupt, lenders will probably refuse your loan application. Be aware that if you make inquiries about a loan from several lenders at the same time by way of comparison, your credit file will now have several entries in it. The lender may turn you down for a loan because of that. By the same token, while one lender may refuse your application, another lender could just as easily accept it.

Debt consolidation will reduce their monthly payments and allow them to pay just one loan and free up some much needed cash for necessities. Above all, they need to decide to take any necessary action before it is too late and they are left homeless and incapable of getting any credit in the future. There is real hope out there.

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