7 min read

What to do if you’re turned down for a credit card

Hannah Patnick
3 February 2017

We’ve put together the top 5 reasons why you might have been turned down for a credit card, and some pointers to stop it happening the next time.

If you’ve been turned down for a credit card, don’t panic.

Being refused credit is not uncommon, in fact just over a third of Brits have been turned down for credit (or the credit rate they want).

If this has happened to you there is light at the end of the tunnel. Being turned down for a credit card is not a life sentence. In fact, it’s something that you can certainly try to improve if you know how. We explore the main reasons why you might have been refused a credit card and what you can to improve your chances for the next time you apply.

Avoiding temptation
If you’ve been refused credit, try to avoid the temptation to apply for more credit cards in a panic to get accepted quickly. Making several applications for credit in a short space of time is likely to worsen your credit score, making it even harder for you to make a successful application.

1. You have no previous credit history

If you don’t have any credit history, you may find it difficult to obtain a credit card. This is because lenders have no way to prove that you are a decent credit risk.

From a high street lender's perspective they would be lending ‘blind’ which they consider too risky.

Although high street lenders won’t offer you a credit card if you don’t have a track record, there are ‘Credit Builder’ credit cards specifically designed to help in these circumstances - targeted at people with a below average credit history or with no financial track record at all.

Because these groups are considered a greater risk, the interest charges are far higher than normal – typically somewhere between 35% APR and 60% APR. But if you use a credit builder card wisely you won’t have to worry about the interest rate. Simply use the card every month for something you would normally purchase anyway – perhaps petrol for your car. When your monthly statement arrives, make sure you pay the balance in full before the due date and there is no interest to pay.

An added benefit is that this positive behaviour will be reflected in your credit record, showing lenders over time that you can manage credit responsibly.

Get your credit report into shape. Start by checking it for free on ClearScore

2. You have a below average credit record

If this is the reason your card application is knocked back you may already have been half expecting the negative response.

Perhaps in the past you may have exceeded your agreed credit limit(s) or missed your monthly repayments – both these things are likely to put off prospective lenders as they will consider you to be too high a risk.

To improve your credit score you need to demonstrate that you are capable of consistently managing your finances. All of the tips in this article will help, and you can also read our 10 steps to a great credit score for more tips.

A tip for next time – check your eligibility
Try using ‘soft’ searching before you next apply for a credit card. Soft searches will give you an indication of whether you’re likely to be accepted for a credit card without affecting your credit score. This means you can make smarter decisions about the cards you apply for and limit the possibility of being rejected for credit.

3. You may be considered to have too much credit already

This is probably the reason that baffles people the most. When a lender reviews your application for credit it will look at your existing borrowing and total credit limits.

Even though you may be comfortably within your agreed credit limit and in some cases have zero balances on your card(s) the new lender will take into consideration the credit limits that are at your disposal.

If you have credit cards that you don’t use any more it will help your credit score and the view lenders take of your finances if you close these accounts, as your total available credit line will be reduced too.

4. You’re not on the electoral roll

If your name appears on the electoral roll it gives valuable proof of your address to lenders who like to know you’re a real, verified person.

It’s a simple process to get on the electoral (or voters) roll which you can do here. If you’re not sure if you’re registered, you have to contact your local authority. You can find their details by entering your postcode online (About My Vote has a good checker)

5. Out of date financial associations

Lenders take into account any financial associations you have – past or present – when deciding on your application. So if you’ve had a joint financial agreement (such as an overdraft or loan) with a partner who is now your ex, this could be harming your chances of getting a new credit card. The same goes for previous housemates and even previous tenants living in your house.

You have the right to contact each of the three main credit reference agencies (Experian, Equifax and CallCredit) and apply to be financially disassociated. You can also request that a statement of correction is put on your credit file.

by Hannah Patnick

In her previous life Hannah was a consumer journalist making primetime television shows. Now she's ClearScore's Content Producer. Amongst her many talents, Hannah is famed for her excellent tea-making skills.

ClearScore exists to make your finances simple.
We offer a free service where you can handle everything to do with credit in one place. In your ClearScore account, you can see your credit score and the full details of your credit report. Your credit cards, mortgages, mobile phone contracts, loans, overdrafts and utilities all on the record. Our goal is to make ClearScore as simple, calm and straightforward as possible. Money is stressful enough.