Refused Credit - Help and Advice
Credit of any sort, from mortgages to credit cards, has never been handed out freely. You have a better chance of getting the deals you want if your credit report shows lenders that you are in control of your finances and are likely to make any agreed repayments on time and in full.
Turned down for credit - Reasons why and actions to take
Lender's decision
The lender always decides whether to accept or refuse your application. If you’ve been refused, only the lender can tell you why because only they know. If you ask, they should be able to give you the main reason. This is useful because it might identify action you can take to address the situation, such as registering on the electoral roll, checking your credit report or asking the lender to reconsider its decision, especially if you can provide additional evidence to support your application.
The lender may have said no because it doesn’t think you’re in a position to take on further credit. If you are struggling to make existing repayments, ask whether your lenders can help you to work out a schedule of repayments you can afford or arrange a temporary payment holiday. You can also get help from providers of free debt advice – see useful links and resources below.
Your credit report
Your credit report includes any credit accounts you have had in the last six years and how you have managed them. Adverse information on your credit report - such as late repayments, defaults or court judgments, may lead a lender to think that you are unlikely to repay future credit on time.
If you’ve been refused credit because of the information held on your credit report, you should check your credit report carefully and take the necessary steps to improve it or your financial situation generally.
Application form mistakes
Fill out your application form carefully, and don’t just guess at answers such as how long you’ve lived in a property. Supplying false information may lead to delays or cause the lender to refuse your application. It may even be viewed as fraud.
If you have made a mistake on your application form, ask the lender if they will allow you to correct it and resubmit your application.
Multiple applications within a short period of time
Plan your credit applications carefully and try to spread them out where you can. Each time you apply for credit, the lender is likely to check your credit report and leave a credit application search footprint. Although being refused credit isn’t registered on these footprints, simply making several credit applications close together can worry lenders as this can be a sign of financial difficulties or even fraud. So target your applications carefully and always investigate any credit refusal before applying elsewhere.
Other types of search footprint, such as those left by identity checks or quotations, are not used by lenders to help calculate your credit score.
Not the target customer
Lenders have different lending policies and sometimes target particular types of customer - those with high or low incomes, for instance. Lenders should be able to tell you if this is the reason they’ve refused your application, so ask them. It’s certainly worthwhile checking any guidance the lender provides before you apply, to help avoid wasted applications.
Checking your Experian credit report online before you apply for credit can help you spot any potential issues in advance, allowing you to take the necessary action to get them resolved.
Increasing the chances of being accepted for credit
Top tips to improve your chances of getting credit when you want it.
- Be a good borrower - Use credit sensibly, stay within your agreed limits and pay bills and repayments on cards, loans and your mortgage on time each month.
- Check your credit report - Regularly review your credit report so you can monitor your current financial situation and plan future improvements. Make sure that every entry is correct and query anything that isn’t.
- Utilise tools and resources - Review your spending, set a budget and stick to it. Use price comparison sites to find the best deals on utilities and insurance as well as loans, mortgages and credit cards. If you view your Experian credit report through Experian CreditExpert, we can help match you to financial deals you’re more likely to be accepted for.
- Financial ties - If you have a joint account or have applied for credit with a partner, you are likely to be linked to them on your credit report. This is known as a financial association. Being linked to someone else could affect the outcome of any credit application you make. As a result, it’s a good idea to encourage anyone connected to you to check their own credit report too. If you are no longer financially connected, make sure you get the link broken so that any problems they might have will not affect you.
- Avoid extra credit - Additional borrowing could rack up debts you can no longer manage and that could mean being refused for credit you really need in the future.
If you are finding it difficult to get credit, you may find it easier to apply to a lender you have an existing relationship with, such as your bank.
Useful links and resources
If you’re having trouble coping financially, you can get free advice from the following organisations:
- Citizens Advice Bureau - Helps people resolve their legal, money and other problems by providing free, independent and confidential advice.
- StepChange Debt Charity - Get free anonymous debt advice from the UK's leading debt charity.
- Money Advice Service - Free financial health check, plus other tools and advice.
- National Debtline - The helpline that provides free confidential and independent advice on how to deal with debt problems.
- Payplan - Free, confidential advice about debt.
One of the best ways to stay in control of your finances is to check your Experian credit report. You can do it for FREE with Experian CreditExpert*.
