I’ve been rejected for a credit card or loan… what do I do now?
If you’ve just applied for a credit card or loan but have been turned down… STOP.
Any applications for credit that you make will appear on your credit file, whether they are accepted or rejected.
Get all of the facts from the lender
Okay – you’ve been turned down, but you need to find out WHY.
Simply, the lender has all of the answers to that question, but you need to know what questions to ask…
Which credit reference agency do you (the lender) use?
Why did you refuse my application?
This will give you the information you need to check your own credit file on that credit reference agency, and you can then inform them of any mistakes on your file.
Plus, if you then know why you were rejected, you know the area you need to improve or consider before future applications.
NOTE: If you need to improve your credit score, this does not happen overnight and may take a number of months to see any change.
Think twice before applying again
Think very carefully about your situation before applying anywhere else, because if you apply again, you run the risk of being rejected again.
If you make several applications for credit within a short timeframe, you may give the impression that you are desperate for cash, which may make lenders think twice about giving you the funds required.
If you get rejected by those additional applications, this will likely have a bigger effect on your credit score, and you may end up paying more in interest as a result as you will be seen as a greater risk to lenders.
Evaluate the purpose of the loan
What is the purpose of the loan application, is the purchase or project a luxury?
If you are overstretching yourself to get the latest car or go on a holiday that is more expensive, now is the time to think again about this purchase.
You’ve been rejected by a lender for the amount you need, so can you get a slightly cheaper option that would increase your chances of getting accepted.