Skip to main content

Turned down for credit? Here’s what to do

Stop applying for credit

If you’ve been turned down for a credit a lot, it’s important you stop applying. In fact, stop right now. Thank you very much. But why? The reason is that every time you apply for credit, it leaves a footprint of your application on your credit file. This footprint is visible to lenders. Why does this make a difference? Well, if lenders can see you’ve been applying for credit and you’ve been repeatedly turned down, they might think you’re too eager to borrow money. What’s more, if other lenders have turned you down, they might think: why should we accept you? Put simply, multiple credit applications can be a sign of financial difficulty. As a result, lenders might not feel comfortable letting you borrow money. The cycle can go on forever. You apply for credit, get turned down, apply again, get turned down — and all you’re doing is making your situation much worse.

Use an eligibility checker

An eligibility checker is a great tool to use before you apply — particularly if you’ve been turned down for credit a lot. It gives you an idea of how likely you are to be accepted for credit before you leave a footprint. It works by carrying out a soft search on your credit history, using key pieces of information to create an idea of your financial credibility. Some lenders can see soft searches on your credit file, but they aren’t allowed to let this affect their decision. An eligibility checker gives you a percentage of how likely you are to be accepted. If your chances are low — don’t apply.

Understand why you’ve been turned down for credit

If you’ve been turned down for credit, it doesn’t necessarily mean your credit rating is terrible. It could just mean you’ve been applying for the wrong kind of credit. Those with impeccable credit ratings are more likely to be accepted for a wider range of products, and will get much better rates and deals. If your credit rating needs some improvement, you still could be eligible for credit products: you’re just unlikely to be accepted for those with better perks, like cashback and lower interest rates. So, those with poor financial history can still get credit. You just have to be more mindful about how you manage these products. For example, you might be accepted for a credit card with a very high APR. This is fine to use, but you should try and pay off the full balance each month, to avoid expensive interest charges.

Check your credit report

If you’ve been turned down for credit, it’s best to check your credit report. It could be that there are inaccuracies on your credit file that are holding you back. For example, if your personal details are incorrect — such as your name and address — your credit applications could be rejected. Lenders might think your application is fraudulent. Pay special attention to the number of accounts you have where you’ve taken out credit. If there’s anything you don’t recognise, contact the lender straightaway. It could be a sign of fraudulent activity. If this is the case, it might be why you’ve been turned down for credit. Lenders will see you already have multiple accounts where you’ve taken out credit. However, if these accounts aren’t yours, you need to address this issue as soon as possible. There also might be small things you can do to give your chances of acceptance a boost. Being on the electoral register, for example, helps lenders verify your address history. This assures them your application for credit is legitimate. You can get a Free Credit Report from TotallyMoney. Nevertheless, it’s best to check a report from Experian and Equifax, too. Credit reference agencies have different information on you, depending which one the lender reports to. You can never assume that because information on one report is accurate that it will be accurate on others. Rebuild your rating to avoid being turned down for credit in the future It’s no secret: the better your credit rating, the more likely lenders are to accept you for credit. It’s simple, right? Not necessarily. It’s all well and good for someone to say you need to improve your credit rating, but how do you do this? First things first: check your credit report, as mentioned above. It might help you identify areas that need improvement. What you don’t want to do is make changes to any area that’s already in good shape. To use a tired phrase: if it’s not broken — don’t fix it! For more tips on how to improve your credit rating, we recommend you look at our guide — ‘Improve Your Credit Score’.

What products are there to help me if I’ve been turned down for credit?

You’ve probably heard it before: you have to use credit to build credit. But if you’ve been turned down for credit a lot, how can you do this? No matter how desperate you are to borrow money, you should avoid payday loans. They can be more painful than stepping on Lego, and often make your financial situation much worse. Instead, there are a few products you can try.

Guarantor Loans

If you’re not eligible for a loan — even one designed for those with bad credit — you’re not completely out of options. A guarantor loan is where someone guarantees to pay on your behalf if you’re unable to. They are specifically designed for those with poor financial history or those who have been repeatedly turned down for credit. The guarantor could be a close friend, relative, or colleague. Remember, though, they are committing to paying the loan for you if you don’t meet your payments. It’s a lot for them to think about, but it’s an option available if you know someone suitable and willing.

Prepaid credit cards

These work similarly to a pay as you go mobile phone. You top up the card with a certain amount, and use that card for your spending. It means you can’t have a balance below £0. There are a few varieties of cards like these, but you need to look out for one that has a credit-building option.

A summary: what to do if you’ve been turned down for credit

• Stop applying for credit • Check your credit report to see if you can identify where you’re going wrong • If you need to apply, check your eligibility before you do • Make sure you’re applying for appropriate products • Consider prepaid credit cards and guarantor loans to rebuild your credit.

We're on a mission to help everyone move their finances forward and gain financial momentum.


TotallyMoney is an independent credit broker, not a lender. Our comparison service works with most leading lenders, covering the majority of the market. Though we may be paid a fee by lenders or brokers this never influences how our products are ranked.

We don't provide financial advice. Product information is obtained from independent sources and rates displayed may vary depending on your personal circumstances. While we make every effort to ensure that information is up to date, you should always confirm the terms of the offer with the product provider.

TotallyMoney is owned and operated by TotallyMoney Limited which is registered in England and Wales (Company Registration Number 06205695). TotallyMoney Limited is an Appointed Representative of TM Connect Limited, which is registered in England and Wales (Company Registration Number 06967012) and authorised and regulated by the Financial Conduct Authority in respect of consumer credit related activities (FCA FRN: 511936). Registered Office: 5th Floor, Halo, Counterslip, Bristol, BS1 6AJ. Credit is available, subject to status, only to UK residents aged 18 or over.