If you have been delegated to a new credit card or loan application, you can take steps to understand why. There are also things you should avoid because they can make it even harder to get a loan in the future. Learn more about alternative ways of borrowing to consider or avoid such procedures.

What should you say if you have been refused a loan?

If you are declining a loan or loan, as a result of a search of your reference file, the lender should inform the lending company and which credit agency has used it. You can contact a credit agency and ask for a copy of your file. You can also ask the lender why they refused you – and what information is involved – but they don’t need to explain in detail.

If you notice an error in the loan file, write to the reference credit agency and ask for correction.

Make sure they explain why you are wrong and attach all the evidence you have. The agency has 28 days to act. The relevant details in the credit report will be marked as “questioned” when investigating. If you have been denied a loan or a credit card was denied, think carefully before applying for an increase in credit. All your credit applications – successful or not – will be visible in your credit file.

Several applications can make lenders think you are desperate for cash. This can affect your credit score badly. Your credit rating affects whether you can get a loan and how much you can borrow.

This can affect the interest rate you can charge.

What to do next?

If you have to borrow to pay off other debts …

If you are looking for a loan to pay off other debts or to be able to pay bills and living costs at the end of the month, it is worth talking to your Debt Advisor as soon as possible. They will be able to help you come up with a plan and avoid getting deeper into debt. Search for them on the web for more information.

Learn more about where to get free debt advice

If you are looking for purchase financing and can afford it …

If you are looking for a loan to finance a purchase, such as buying a car, and you can afford to pay back the loan or loan, check your credit score. You can do this by getting a credit report – this can be decisive in influencing the lender’s decision about whether to give you credit or not. Contact one or more reference agencies to request a copy of your report.

Read our guide on checking your credit report.

There are many organizations that offer free, confidential debt advice. If you need to borrow some money and you can afford to pay back, there are other options besides credit cards and personal loans.

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