Why has it happened?
It’s not unusual to be refused credit. But if you can learn why your application was rejected, it could help you sort the problem before you apply again.
First of all, think about the basics. Have you had a bankruptcy in the last few years or do you have County Court Judgments against you? If you've gone through any serious money problems - particularly if they've involved the courts - they’re likely to show up on your credit file, making it more difficult to get credit.
Another reason could be that you’ve given incorrect info on your application without realising it. You may have got the dates wrong for a previous job or you might have changed addresses and provided an old postcode. Make sure you're on the electoral roll so a lender can verify your address. If your references aren’t up to scratch, they could refuse your application.
A few other possibles…
- Poor credit history: If you miss payments, pay late or go over your credit limit regularly, it could affect your credit rating.
- Thin credit file: If you haven't taken out credit before, lenders may find it hard to decide if you can manage a credit agreement.
- Employment history: If you’ve moved jobs often in a short space of time, lenders may have an issue with inconsistent wages. The same can be said for income as you may be rejected if a lender doesn’t think you earn enough to keep on top of repayments.
Be aware of your credit history
If none of the above sound likely, it could be that your credit history is ‘poor’ or possibly non-existent. If you’ve had credit before, like a phone contract or store cards, and you've missed payments or been late paying, this may be logged with the three main credit reference agencies (Experian, Equifax and TransUnion).
Lenders use info from these agencies when deciding whether to offer you credit. You can check your credit report by using services like ClearScore or the Snoop app. You can also get in touch directly with the credit reference agency your lender uses.
It’s a smart idea to go through your report carefully. If there are any false details, you should contact the credit reference agency asap to have it put right.
If everything looks correct, the info on your credit file should at least give you an idea of why you were rejected. While there's no quick fix to change your credit history from ‘poor’ to ‘good’, you can get there by maintaining good financial habits long term.
Does a decline affect your credit score?
It may impact your score depending on what checks they do to verify your financial situation.
If a bank or credit provider has declined your application after a ‘soft’ credit search, it won’t change your score. But, a refusal after a hard search can affect it.
Basically, the impact on your credit score will come from the check, not the final decision on your eligibility.
How to get accepted for credit
When you apply for credit, a lender searches your credit file. All searches, including unsuccessful applications, are recorded and visible to other lenders (unless they're ‘soft credit searches'). As a result, multiple searches and credit applications may affect your credit score.
To prevent this, you might want to leave it between three and six months before your next application. During this time, paying bills on time and meeting all your financial commitments could help to improve your score. With some lenders, you can check if you’re likely to be accepted using soft credit searches. As we mentioned earlier, these don’t impact your score.
Ways to improve a poor credit score
An improved credit score will naturally increase your chances of being accepted for credit. You might want to consider the following if you’re looking to achieve a good score.
- Avoid applying too often in a short period of time.
- Keep your identity genuine.
- Make sure your credit details are up to date and accurate by getting a copy of your credit report.
- Track your progress by regularly checking your credit score.
- Make all other payments on time.
A Vanquis Credit Card may tick all your boxes
Our credit cards are specifically designed to help people rebuild their credit rating. With a Vanquis Credit Card, you borrow and repay small amounts on a regular basis.
We can’t guarantee you’ll be accepted but we do have a long history of helping people with poor or non-existent credit histories. We also understand that these situations can’t be avoided sometimes -so get in touch and let’s see if we can help get you back on your financial feet.
FAQs
How long does refused credit stay on file?
Credit files don’t typically record how many times somebody’s applied for and been denied credit.
However, they do log the number of ’hard’ credit searches. Over time, frequent applications can lower your credit score. But as long as you’re not doing too many, you shouldn’t see a big impact on your file.
How do I appeal a refused credit card application?
If you’ve been declined after a credit check, and feel like they missed something or it was unfairly rejected, contact the lender to ask them to reconsider.
If this happens, it’s worth knowing there may be further hard checks on your credit file which can impact your score.
How long should I wait to apply again?
Typically, it’s best to give it at least three to six months in between credit card applications.
An application (after initial eligibility checks) will always involve a hard search on your credit file. This means you risk damaging your credit score with too many applications in a short space of time.
Lenders could also think you’re looking for too much credit all at once, which may make them wonder how you’re going to use it.
