Don't Panic!

If you've been refused credit, it's important to remember that if you have a bad credit history only a limited number of lenders will be able to help you. If you apply to many credit providers in the hope that one will help, the more you are refused the more you will damage your credit score.

Instead, adopt a credit repair process that will maximise your chances of borrowing successfully.

A credit repair process will:

• Repair your credit
• Help you select the correct providers
• Reduce the cost of borrowing

Reasons why

You may be refused credit for a number of reasons including:

• Information on your credit report
• Information you gave them
• May not meet their criteria

If you have been refused credit because of your credit history, make sure that you have been assessed fairly. To do this, ensure that your credit report is accurate. Make sure there are no inaccuracies causing you to be refused credit unnecessarily.

Sometimes, the information you provide may lower your credit score. Examples include your income.

You may simply not meet the lenders target profile. Each lender likes a certain type of customer. For example, some will accept bad credit histories while others will not.

Every lender has the right to refuse you credit. If you have a poor credit history, make sure you repair your credit to maximise your chances.

Want to know why you have been Refused Credit?

Ask the lender. Unfortunately you are unlikely to obtain a detailed explanation of why you were refused credit. Fraud prevention policies mean that a credit provider will not release lots of information about their credit scoring and application procedures.

You are more likely to be told it was for one of the following reasons:

• Low credit score
• Adverse credit report information
• Other specifics such as age, being unemployed, existing account performance etc.

If the decision making process is automated, you have the right to request a manual check.

Appealing Against Refused Credit

A credit provider may have a designated officer or team for dealing with appeals of decisions made using automated methods.

You should be given an understandable explanation of the scoring used and the opportunity to present further information for consideration. You will not be given a breakdown of your credit score, however, you should be given details of the logic used in the automated process if you request it.

Your application will then be reconsidered and you will be informed of the decision. You may be declined or offered different terms.

Should I Reapply after being Refused Credit?

A new application for credit will not be declined just because your previous application was declined. However, the exceptions are:

• If the new application has been completed dishonestly (exaggerated income, for example)
• If your application is the same as the previous, and there has been no change in the lenders credit scoring system.
• If your application is the same as the previous, and there has been no change in the score that the lender will accept your application (see credit scoring).