I have a good credit score, so why was I declined credit?

We get that it can be frustrating to have your credit application declined when you thought your credit score was good. It just goes to show that it’s not all about the number. Here are some reasons why you may have been turned down.

1. You don’t appear to have enough disposable income

Any lender will want to be confident that you can afford to pay them back. They’ll look at your credit report as part of an affordability check, and you’ll likely be asked to provide details of your employment status and salary when you apply. If you don’t earn what they consider ‘enough’, your application may not be successful.

2. You’re not on the Electoral Roll

Whenever you apply for credit, the lender will want to verify your name and current address. As part of this, they’ll check your details through sources such as the Electoral Roll. Credit reference agencies, banks, phone providers and so on all use the Electoral Roll to verify your address. If they can’t, they may decide to deny your application on that basis.

3. You don’t have a fixed address

Similarly, you may find it difficult to understand your financial history and verify where you live. If you move around a lot, or change address many times in a short period, you could be considered to have a less stable situation – making lending to you seem more like a risk.

4. You’ve made a mistake on your application

One of the more common reasons for a declined application is a mistake on the application form. This can be something as small as a typo in your name or address, or something slightly more complex like not being able to verify a piece of information you provided. It’s really important to be honest and accurate in every application, even if you’re applying for something simple like a phone contract.

5. Your credit report contains warning signs for lenders

Although the points above outline specific reasons that might affect your application, there could simply be a flag on your report that doesn’t meet the lender’s criteria. These won’t necessarily be things that are reflected in your credit score, but can still be factors that a lender would interpret as a risk. For example, you’ve taken out lots of lines of credit, you have a financial association with a low credit score, or you’re using your credit card more than usual.

Don’t be hard on yourself for one failed application. Each lender will have their own criteria – so what matters to one might not even be a consideration for another.