What if I can't get a card or loan?
Declined for finance?
If you’ve been declined for a credit card or loan, don’t panic! You’re not on your own. These three simple steps will get you back on track and give you the best chance of acceptance in the future.
Step 1 - Stop Applying
Stop applying and pause. From speaking to a number of our customers, there is an underlying belief that if you fire off applications to every lender you can find, one is bound to say ‘yes’. This is not the case! It’s actually the opposite. Making lots of applications in a short space of time can make lenders think you’re desperate for cash, and this isn’t good for your chance of acceptance. Instead, take a step back, and if you do decide to make another application, try and wait as long as you can, then use an intelligent search tool, like Choose Wisely’s Smart Search to identify lenders which are most likely to accept you.
Step 2 - Understand why you were declined
Understand why you were declined. If you’ve been turned down for a card or loan, your first step should be to work out ‘why?’. Pick up the phone and have a chat with the lender, as they should be able to give you the answers. If for some reason they can’t, they should at least be able to point you in the direction of the credit agency they used. In any case, be sure to check your credit file, making sure it’s up to date, and free of mistakes. A low credit score or mistake on your file might have been the reason your application was turned down. Alternatively, you could have been applying for the wrong type of loan. A supermarket loan might seem like the cheapest option, but if you’ve got bad credit, there’s a high chance that you won’t get approved for this type of loan.
Step 3 - How to avoid borrowing
Do you really need to borrow? If you’ve been turned down for a loan or card, then ask yourself, ‘do I really need to borrow?’. Struggling to cover bills and debts? Then borrowing more is probably not the answer. Instead, try to get back on track with your finances sing the practical tips in our guides. You could identify small savings like choosing a cheaper lunch or car-sharing for your commute, and work towards bigger goals, such as quitting smoking. Being able to see where you’re spending money will help you identify what you can afford to go without. Maybe try a budgeting app on your phone, or use a connected card, like Monzo, to keep on top of your finances. After you’ve understood your situation, you could consider applying for a credit builder credit card that helps grow your credit score.
What should I remember?
If you’ve been declined for finance, don’t worry. You do have options. But it’s vital that if you decide to continue your search, you do so extremely carefully. So remember…
- Make sure you know what’s in your credit file.
- Avoid applying to more than one lender within a short space of time
- Make it easy to keep track of spending, so you can see where to cut back
As always, know where you stand, compare your options, and of course, make sure you choose wisely!