We’ve all been there. You think you’ve found the perfect credit card, you’ve done your research. You fill in the application form and, bang!, “unfortunately your credit card application was declined.” It’s not a nice feeling.
Firstly, don’t panic; credit declines are just a part of life and how you handle the situation could determine whether you get declined again or get accepted next time. Don’t go rushing into another application just yet. Read this guide first.
Secondly, try and work out why you might have been declined. If you’ve read our guide on credit ratings you’re probably very familiar with what’s on your credit report. If you’re not, this should be your first port of call.
All of the three main credit agencies (Experian, Equifax, CallCredit) will provide you with a digital or printed copy of your statutory credit report on demand – often for a nominal £2 fee.
Read it through, and look for any glaring errors.
Things to look for:
Have you got a big overall credit exposure? Add together the credit limits of all your existing credit cards, is it a big number when compared to your salary? If so you may want to close down some cards you don’t need.
Have you got high credit utilisation? Are you using a lot of your available credit? Lenders don’t tend to like customers who are using a lot of their available credit (it looks like you’re having difficulty managing your money). If you’re credit utilisation is high you can either call your existing provider and see if they can increase your limit (by don’t forget our first point!). Alternatively, try and pay some of the balance off.
Are you on the electoral roll for your current address? This is really simple to do and only takes 5 minutes on the government website. Lenders like stable address history so if you’ve moved around a lot over the last few years this could count against you.
Are there any irregularities with your address? We hear stories all the time of people being declined because the lender is unable to match their address. Look at your last few pieces of junk mail; it could be that your actual address is written slightly differently to how you input it in the application form.
Summary
Read our guide on different types of credit cards. It could be that the card you were applying for clearly wasn’t the best one for your particular situation. If so, it could be that an application on a different card may be more successful.
Lenders’ scorecards are all different and often changing depending on the kind of customer they are trying to attract. It may be that this time you were just unlucky.
Whatever the reason for your decline, don’t make any rash decisions. Lots of applications in a short space of time can make you look desperate for credit which could count against you. Take some time and do your research before you think about applying again.
