Refused credit? What to do next
And how to boost your chances of success with future applications
Been refused credit? Here's how to find out why, what to do next, and how to improve your chances of being accepted for credit before applying again.
First, a quick overview if you've been refused credit...
The most important thing is to avoid immediately applying for other credit. It can impact your credit score and may make you appear desperate for cash, which lenders may consider a risk.
The credit refusal won't show up on your credit file - but the application for credit will.
Ask the lender why you were declined. It may have concerns about your affordability, past missed payments, too much existing debt, limited credit history, it can't verify your identity, or it believes you don't meet its lending criteria.
Check your credit report for free and address any errors. You can ask to have information updated and corrected on your credit file.
Boost your chances of getting credit next time. Get on the electoral roll and register to vote, correct errors on your credit file, build up your credit history with smaller forms of credit if you can, and ideally wait at least three months before reapplying.
Use our credit card eligibility checker before applying for any future credit cards.
See also:
- How to check your credit report for free
- Debt help
- Credit cards for bad credit
Refused credit? Don't panic! Here's what to do next
Here are some practical tips if you've been rejected for a credit card:
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Don't immediately apply for more credit. Try to wait at least three to six months if you can. Each time you submit an application, the lender will run a hard search on your credit file, which will temporarily lower your credit score by a few points.
This, in itself isn't a big problem, but repeated hard searches in a short period of time can lead to greater drops in your credit score and signal to lenders that you’re a risk. It implies that you’re in urgent need of cash and therefore less likely to be in a position to repay any debts reliably. -
Ask the lender why you were declined. While they have to acknowledge your request, they may not give a detailed explanation, but they may provide possible reasons why your application was declined. It's worth asking, as this could help you understand what to improve before applying again. Regulatory guidance on what information lenders should provide is currently under review.
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Check your credit report. It's a detailed record of your borrowing and repayment history, including loans, credit cards and mortgages. Reviewing yours can give you an idea as to why a credit card company might not want to offer you a card. See how to check your credit report for free.
How to boost your chances of getting credit next time
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Correct errors and inaccuracies on your credit file. Contact the company, bank, or lender showing the incorrect information, or contact the credit reference agency if there are errors with your personal info. You can add a Notice of Correction (NOC) if something is accurate, but requires further explanation.
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Use a credit card eligibility checker to see your odds of acceptance before you apply again. It uses a soft credit check, so won't leave a mark on your credit file. Only do this once you've addressed any issues raised by the card company or on your credit report.
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Consider building your credit history with smaller forms of credit. Making payments on time and in full can help show lenders that you're a responsible borrower. Only take on credit that you can comfortably afford to repay.
Why have I been refused credit?
There's no single universal pass mark for getting credit. Lenders decide who to offer credit to, not the credit reference agency.
We've listed some common reasons why people see their applications for borrowing declined. Some of these are harder to fix than others but, if possible, try addressing the issues which affect you before making another credit card or loan application:
Affordability issues. Lenders will check your income and existing debts to understand whether you can afford to repay the credit.
Missed payments. These can be an indication that you'll miss repayments in the future.
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Debt defaults and county court judgments (CCJs). These stay on your credit report for six years.
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Limited credit history. If you've never had a credit card or loan, lenders might be unwilling to offer you credit because they can't see how you'll manage it based on past performance.
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Not being on the electoral roll. Being registered to vote at your current address is the easiest way to boost your credit score. Credit firms use the electoral roll confirm your identity and address.
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Application mistakes. Something as simple as misspelling your name could spell disaster for your application, as it makes it harder for the lender to identify you during their checks.
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Lender-specific criteria. Some credit cards have minimum income requirements that they don't always make clear before you apply. Being too young or unemployed could also be a reason you're rejected. See How to build your credit history as a student or young person.
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Identity fraud. If someone's used your info to set up a bank account in your name, this should appear on your credit file. Contact the fraud department of the bank where the fraudulent account's been opened, or file a report with Report Fraud UK.
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You're financially linked to someone with a bad credit history. Simply living at the same address or being married does not link your credit files. But if you have a joint bank account, joint mortgage, joint loan, or act as a guarantor for someone it can. Ask the credit reference agency to remove any incorrect or no longer relevant financial associations (you'll likely need to provide proof).
Does refused credit stay on my file?
No. Your credit report will only show that you applied for credit - not whether it was approved or refused. These hard searches typically stay on your credit report for 12 to 24 months.
Can I appeal a refused credit card decision?
You have a right to appeal the decision, but it doesn't mean it will be overturned. If you believe there's an error on your credit report or it's missing information, you should get these corrected and then provide evidence to support your appeal.
Be aware that lenders may run another hard search on your credit file as part of an appeal.
Good credit score but still refused?
Sometimes people with good credit scores can be declined. That's because lenders look at more than just your score when deciding whether to accept an application.
They'll also consider factors such as your income, recent credit applications and their own lending criteria (which isn't always clear).
Should I get a bad-credit card after refusal?
A bad-credit card, or 'credit builder' card can be a useful tool in getting credit and building your credit history. But remember, do not apply for one immediately after being refused for another credit card or loan. We've more info in our Credit cards for bad credit guide.
Refused for a phone, loan or mortgage?
Broadly speaking, the same credit and affordability checks will apply if you take out a mobile phone contract, or apply for a loan, overdraft or mortgage. But what you do next may be differ, depending on the type of credit you need.
Check out phone contracts for those with poor credit, how to boost your mortgage chances, and try our Loan eligibility calculator.
Check your credit report for free
There are three credit reference agencies in the UK: Equifax, Experian and TransUnion, where you can check your credit report for free:
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TransUnion: Available via MSE's Credit Club, along with our very own Eligibility Rating – a combination of three factors, which gives you a broader idea of whether a lender will accept you.
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Experian: Available via the Experian app, which shows your credit report and score. If you want Experian's insights on how to improve your ability to get credit in future, it directs you to its paid version.
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Equifax: Available via Clearscore*, featuring Equifax credit reports and scores as well as an eligibility checker.
We've full details in our How to check your credit report for free guide:
Struggling with debt? Don't borrow more
Getting a credit card or a loan is not always the right thing to do, and if you have a poor credit history or too much debt already, you might be rejected for further credit anyway.
If you're struggling to pay for your outgoings or meet your debt repayments, or are building up more debt just to pay for day-to-day living, getting another credit card or a loan could just add to any debt problems in the longer term.
Our full Debt help guide runs through the practical steps you can take if you're struggling with debt, including specialist resources and charities you can contact for free one-on-one debt counselling and advice.
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