Why was I turned down for credit?
Being turned down for credit can be discouraging, but if you can find out why your application was rejected, it can help you address the problem before you make any more applications.
First of all, consider the basics – have you had a bankruptcy in the past few years, or do you have any County Court Judgments against you? It may sound obvious, but if you've had any serious money problems in the past – particularly if they've involved the courts – they will probably show up on your credit file and make it more difficult for you to get credit.
Another possible reason is that you may have unknowingly given wrong information on your credit application – for instance, you might have got the dates wrong for a job you had, or you might have changed addresses recently and provided an older address. Making sure you're on the electoral roll, so a lender can verify your address. If your references don't check out, a lender might refuse your application.
Few other reasons might be:
- Poor credit history - If you delay payments or exceed your credit limit quite often, your credit rating will be affected
- Thin credit file - If you haven't taken out credit in the past, credit lenders may find it challenging to assess your ability to manage credit.
- Your employment history
Check your credit history
If none of the above apply, the most likely explanation is that your credit history is "poor" – or possibly non-existent. If you have had credit arrangements in the past (which may include mobile phone contracts, store cards and so on) and you've missed or been late in paying them, this will show up on credit reference agencies, such as Experian, Equifax and TransUnion.
Lenders use this credit information when deciding whether or not to lend you credit. You can check your credit report by using web services like Credit Expert, or alternatively contact the credit reference agency your lender uses directly. Go through your report carefully – if it has any incorrect information, you should notify the credit reference agency as soon as possible to have your report corrected.
If all details are correct, the information on your credit file should at least give you an idea of why you were rejected for credit. While there's no quick and easy way to change your credit history from "poor" to "good", you can do it by maintaining good financial habits over a period of time.
How to get accepted for credit?
Whenever you apply for credit, a lender searches your credit file. All searches, including unsuccessful applications, are then recorded and visible to other lenders (unless they're "Soft Credit Searches"). Therefore, lots of searches and credit applications might hurt your credit score.
To prevent this, it's sensible to stop applying for credit in the short term and leave it between three to six months before your next credit application. Try to continue paying bills and meeting any other financial commitments you have during this time, and you should see your credit rating recover. Some lenders also allow you to check your eligibility using "Soft Credit Searches" before applying for their products.
Ways to improve a poor credit score
An improved credit score can increase your chances of being accepted for credit. It would be best if you practiced the tips mentioned below to achieve a good credit score.
- Don't make too many credit applications in a short period of time
- Keep your identity genuine
- Make sure your credit details are up-to-date and accurate by obtaining a copy of your credit report
- Track your progress by regularly checking your credit score
- Make sure you make your payments on time
Consider a Vanquis card
Our credit cards are specifically designed to help people rebuild their credit rating by borrowing and repaying small amounts on a regular basis.
Vanquis can't guarantee acceptance, but do have a long history of helping people with poor or non-existent credit histories, and understand that these circumstances happen for a wide variety of reasons. Get in touch with us today to find out how we can help you get back on your financial feet.
