I’ve been refused credit – what should I do?

I’ve been refused credit – what should I do?

author: Dan Griffiths

By Dan Griffiths


Being rejected for credit can be a blow, but it’s important not to take it personally.

Sometimes, the individual lender’s criteria may mean you get turned away when you make an application, but this isn’t something that you’ll be able to change.

If you have been refused credit, it usually has something to do with your credit history. So, it’s time to take action to help prevent it from happening again.

Stop applying!

First of all, one of the worst things you can do if you get turned away for credit is to continue applying for more elsewhere. There will be a reason your application has been turned down, so it’s important to address this first.

Making an application for credit – whether that’s for a credit card, loan or mortgage – usually leaves a mark on your credit history. These marks are often referred to as “footprints”. Future lenders can view these footprints when they access your credit file through one of the credit reference agencies, and too many marks may make you appear “desperate” for credit.

If you’ve been rejected and try to apply elsewhere instead, the new lender will be able to see that you have recently made an application and been rejected. Too many of these footprints can be a deterrent for lenders.

Check your credit history

That’s why your first plan of action should be to check your credit history. You can do this by using one of the three main credit reference agencies (Experian, Equifax or CallCredit), or by using the free services ClearScore or Noddle.

Applying for your statutory credit report from one of the credit reference agencies for £2 is a good way to take a closer look at your credit history to identify any potential issues. 

Once you have looked at your credit history, you should be able see any problems that may have led to your credit application being turned down. If you have missed or been late making any payments to other creditors in the past, this information will remain on your credit report for six years and lenders will be able to see them. If you have any defaults on your credit report, this may be the reason why your credit application was turned down.

However, if you can’t see any issues but your score is relatively low, it might be because you haven’t taken out any credit before. Most lenders like to see some history of managing credit before they lend to you, and this particularly applies to credit with the most attractive rates. However, that’s not to say there are no options available. The Ocean credit card (representative APR 39.9%), for example, is suited to help build a credit history from scratch or to help repair a damaged credit history. 

In some cases, someone else’s debt could be affecting your credit history. To find out, head to our guide here >

The alternatives

Remember that not all types of credit are accessible to everyone. Depending on your credit history, some lenders may not even consider your application. There is a huge variety of different credit products on the market and each lender has its own criteria for who they choose to lend to.

If you have a poor or damaged credit history, it’s likely that the credit products with the most attractive rates or lucrative rewards may be unavailable to you.

So, if your credit history is a bit patchy, it’s best to hold off on applying for the top-end products for now. If you’re in need of a loan, there are lenders that specialise in people with a less-than-perfect credit history. You might use a broker, like Ocean, to compare loan deals for you. Or, you could consider applying for a credit-building credit card and just using it for a small amount of spending each month. So long as you repay at least the minimum payment each month, your credit history will slowly improve.

Disclaimer: All information and links are correct at the time of publishing.

author: Dan Griffiths

By Dan Griffiths

I’ve been refused credit – what should I do? I’ve been refused credit – what should I do?