Why Am I Being Declined For Credit?

Being declined if you apply for a loan is the most frustrating thing in the world, especially when you have no idea why the credit companies are declining your application.

The reasons they give you tend to be very vague and unrevealing, using phrases like ‘too many revolving lines of credit' or ‘not enough established credit' or other reasons that you really don't understand or make sense of. If you've had a mobile phone contract, you've had a line of credit. If you've had a personal loan or a credit card, you've had a line of credit. So why do these lenders keep denying you?


The likelihood is that the problem you have has less to do with how many lines of established credit you've had and everything to do with the way you paid on those lines of credit. Your credit history contains information on every single line of credit that has been reported to the crediting agency and if you should happen to have CCJs, defaults, and late and missed payments showing up on your credit report, then your credit is being negatively impacted by them and bringing your credit score down.

Lenders use that credit score to decide whether or not they want to give you credit, and the only way you can even start to bring that number up is by making regular payments to your creditors for about a year after the payment you missed.

How much credit have you applied for in the recent months? If you answered that question with an answer such as ‘a lot', then being denied credit could be stemming from all of the applications you have put in. Applying for too much credit in a short period of time impacts your credit score negatively, and many lenders see this as an act of a desperate person and possible credit risk. Honestly, they don't care what your personal situation is, and all they see is how many times you've applied and been denied. Stop trying to get a loan if you're being denied over and over again. It will take about six months for your credit record to balance itself back out and have all the applications disappear.

If you have moved and you did not file a new registration card with the Electoral Roll, you could be denied credit. Lenders will not give people a loan if their addresses do not match. Additionally, if you are consistently on the move with as many as five different addresses over a two year span you will not be approved for credit by a lender. They look at this much movement as a sign of instability and no continuity. Once again you look like a risk to them, and they are simply not going to take a chance on you no matter how decent the rest of your credit report looks.

Employment history is the final factor in why you may be declined for credit, and it comes down once again to stability and continuity. The longer you have been in the same job with the same company the better your chances are of getting a loan. Stability and the overall state of your finances are key to getting any form of credit line. Pay your bills on time, stick with your job, and stay in the same place for about five years and you will find that you will once again be able to qualify for a loan or other type of credit line. However, easier said than done! If you find that, for example, you have had to move regularly (maybe because of your job, maybe because you were just moving to bigger and nicer houses) then it is always worth explaining this to the credit company that you are applying to. They always have discretion over these things and can sometimes be persuaded.

 Monthly Repayment   £
  • Please include your total income
  • Income
    Amount ( £) Frequency
    Home Secured Loans Debt Consolidation Bad Credit Home Loans Personal Loans Articles Resources Contact Us