Turned down for credit? 7 simple fixes that will pick you back up.

By Andy Webb

Keep getting turned down for credit? Chins-up giffgaffers, here are 7 reasons you're not getting a yes from the banks.

No one likes getting rejected. It's even more frustrating when you don't know the reasons behind it. So we have compiled some of the most common reasons why people get rejected when applying for a credit card, loan or mortgage. See which ones may have caused you to be denied credit or check to make sure you won't get turned down in future.

1. Mistakes on the application form

Double-check the answers you supply when applying for credit. Just guessing at an answer (like how long you’ve lived at your property) is the worst thing you can do as if it’s wrong the lender may start asking questions as to whether you are really who you say you are.

If you do make a mistake, check with the lender whether they will allow you to correct it and resubmit your application.

2. Black marks on your credit report

One of the main ways a lender decides whether you are a good fit for their product is your credit report. This details any credit accounts you’ve had in the last six years and how those accounts have been managed.

In other words, if you’ve missed a payment – whether it’s on your mobile phone bill, your credit card or your mortgage – it will be on your credit report.

To see your credit report and get an idea of how your application will look to lenders, you can get a free report from Noddle.

3. You’re not on the electoral roll

One of the ways lenders check who you are is by finding your registered address on the electoral roll. If you don’t show up, they may be wary about lending to you.

So make sure you’re registered to vote. It could make all the difference!

4. Mistakes on your credit report

Your credit report is not automatically correct. Mistakes do happen – perhaps you were the victim of identity fraud, or there was a mix up over a late payment. But that mistake, sitting uncorrected on your credit report, could kibosh your chances of getting credit.

You can correct mistakes by informing the lender and if they refuse then contact the Financial Ombudsman Service.

Alternatively, you can contact your credit reference agency (Credit Expert, Equifax, Callcredit, etc) and ask them to raise the issue with the bank on your behalf.

Finally, you could send them a ‘Notice of Correction’. This is a short explanatory note that you can add to your report to give background as to why you think there’s been a mistake.

5. Too much credit

How much credit you already have at your disposal also plays a part in a lender’s decision.

If you have two old credit cards at the back of your wallet that you never use, but which you haven’t closed, each with a £10,000 credit limit, then you’ve got a lot of potential credit already at your fingertips. Would a lender want to add to that?

However, some lenders will actually view unused credit as a plus point, as it shows how good you are at managing your debts.

6. Applying for the right product

When a lender advertises a credit product, they will include information about the type of borrower they are targeting.

For example, American Express asks that applicants for its Platinum Cashback Everyday credit card have a permanent UK home address, a household income of at least £20,000, no history of bad debt, and if they are self-employed they must have been working for more than one year.

So before you go through the hassle of filling out an application form, make sure that you tick all of the boxes. Otherwise, you’re just wasting everyone’s time. And you’re also going to damage your own credit report in the process…

7. Been refused credit before?

Being declined for a credit card can actually damage your chances of getting a different form of credit in the future. To know more about this, click here.

Every time a lender checks your credit report they will leave what’s known as a ‘footprint’. It doesn’t say whether they approved the application or not, merely that they checked you out. Another reason why you may have been turned down for credit is because you have a thin credit file. A credit file forms the basis of a credit score - and a thin credit file is basically one with not much in it, if anything at all. 

If you were declined credit from one lender and straight away went out and applied for cards from three other lenders, suddenly your report has an awful lot of footprints on it. And that could be viewed as a sign of either financial difficulties or fraud, neither of which sounds all that attractive to a lender. If you have been turned down for credit try applying for products that only run a soft credit check so even if you do get turned down you don’t get another black mark on your file.

Top Takeaway

If you do get turned down, make sure you ask why. If it’s an error on your report, get it fixed. And if it’s an error on your part, make sure you learn from it and don’t repeat it. Having a poor credit score can really effect your chances of taking out a mortgage & applying for a loan in the future - let's not make this happen, we have a handy article that let's you know what are the common causes and how to fix them!

It can take a long time to build up a perfect credit record, but it doesn’t take long to damage it!

Comments (0)

Log in or register to add your comment
Not a giffgaff member? Register now

giffgaff gameplan

Copyright ©2018 giffgaff

Representative example for a loan of £4,000 for 24 months at an interest rate of 15.5% APR fixed. In this example the total amount payable (including interest and fees) would be £4633.57 and your monthly repayments would be £193.07.

giffgaff receives a fee for introducing personal loans to Retail Money Markets Ltd trading as Ratesetter.

giffgaff gameplan is a trading style of giffgaff Limited, we are a credit broker and not a lender and introduce loan applications to its selected provider of loans Retail Money Market Limited trading as Ratesetter. Terms and conditions apply. Finance subject to status. 18s and over. Credit is provided by Retail Money Market Limited trading as Ratesetter, 6th Floor, 55 Bishopsgate, London EC2N 3AS Ratesetter is authorised and regulated by the Financial Conduct Authority – Firm Reference Number 633741

giffgaff Limited is authorised and regulated by the Financial Conduct Authority, Firm Reference Number - 680957. Registered address – giffgaff Ltd, 260 Bath Road, Slough SL1 4DX. Company Number - 04196996.

Posts on this site reflect the opinion of the members posting only, and not necessarily giffgaff’s opinions or views. There’s a lot of information here that can help you, however, you must remember that we operate an open forum and sometimes messages that are posted are misleading, deceptive, or inaccurate. If you follow these tips, you do so at your own risk. Always do your research and check the terms.