What should I do if my credit application is declined

Having an application for credit declined can be disheartening. You probably had a plan for the money, so a rejection often means putting life on hold.

It does give you time to prepare for your next application, though. Follow the steps outlined below to improve your chance of being accepted for credit.

1. Don't re-apply

You might need the money, but it’s vital that you don’t reapply straight away - either with the same lender or another one. More unsuccessful applications will only reduce your credit score and ability to borrow further. 

Each credit application you make - successful or not - appears on your credit record, so if you make several in a short time, lenders are likely to think you are desperate for cash. That’s a ‘red flag’ and may well put them off lending to you.

How many credit applications is too many?

2. Ask why you were declined

Before you reapply, you must find out why you were declined because it can help work out your chances of getting credit elsewhere.

As a starting point, contact the lender who declined your application, either by phone, email or letter and ask why you were declined. You may not receive specific details, but it may provide an outline reason.

For example, the lender may tell you that it was because you failed a credit check, in which case you will need to look at your credit record to find out exactly why that happened.

Here is what your credit records tells lenders

3. Check your credit record

If you were rejected because of something related to your financial history, check your credit record to find out what is affecting you.

Your credit report should highlight anything that is working against you. For instance, negative information could be putting lenders off, such as a history of missed or late payments on other credit accounts. 

Alternatively, it may be that your credit history simply isn’t substantial enough. Lenders like to see evidence of regular repayments on debts, so if you haven’t borrowed before or only have limited borrowing experience, you may be rejected. This might be the case if you are new to the UK. 

Even if your finances are solid, lenders may reject your application if they cannot verify your name and address. Make sure you are registered on the electoral roll, as this is where your credit record will draw this information from. If you have changed your name, make sure it correlates with what is shown on your credit record. 

Here is how to improve your credit record

4. Use eligibility checkers

In some cases, you may not find out why you were rejected and it may simply be a case that you weren’t the lender’s ‘target’ customer.  

Whatever the reason, it’s good practice to wait a few months before you make another credit application to ensure you don’t damage your credit score with a flurry of applications.

Before you risk being rejected again, you should also check that you meet the application criteria. Where applicable, take advantage of free eligibility checkers to tell whether you are likely to be accepted for products like credit cards and loans before you apply. These use ‘soft’ credit checks that won’t leave a mark on your credit record and give you a good indication of whether or not you’ll be accepted.

Whatever the form of borrowing you need, here are some tools to help ensure your application is successful: :

• Credit card: Use our credit card eligibility tool to determine which credit cards are most likely to say yes based on what you need.

• Loan: Use our loan repayment calculator to see what your repayments could be for the loan amount you want.

• Mortgage: Look at how much you could borrow with our mortgage affordability calculator to get an idea of what properties you could buy.