I’ve been refused credit. What can I do?

If you’ve been refused credit you can’t always find out why easily. Refusal can depend on any of the many
factors that make up a credit score, such as historic bankruptcy or missed payments on borrowing, and
also electoral register and out-of-date address information. In some cases, it can also point to an instance
of identity theft, so it is worth trying to find out why the application for credit has been refused, especially
if it is an unexpected rebuttal.

First things first, don’t apply again – every time you apply for credit, it shows on your credit reference file
and further applications, whether they are refused or not, can have an effect on your credit score. Just to
add to this – it can also make you look desperate to lenders if you apply several times for credit within a
short space of time. This can affect the type of borrowing you qualify for.

What happens next really depends on why you need to borrow, as there are other options if it is because
of financial difficulty. If you’ve tried to buy something but been refused and can’t understand why, as the
repayments are within your means, then you need to get access to your credit report. There are credit
report agencies that can help you do it – some will offer a free service and others a paid subscription –
shop around!

Studying your credit report can reveal insights into your borrowing history. It records late payments,
credit applications (accepted and refused). It records every time someone (like a lender) accesses your
report to find out how viable you are. You should be able to work out why your application has been
rejected from there - go through it carefully, though, as any unfamiliar entries can be further investigated.
If you think you’ve been a victim of identity theft, you need to address this straightaway to avoid any
losses and further damage to your future credit rating. Non-profit organisations, such as Cifas, have got
lots of advice on how you can handle this side of things.

Good luck!

https://cifas.org.uk/services/identity-protection