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Why might a credit application be turned down?

Nobody wants to be disappointed, but there are some common reasons why a credit application might be turned down.

It’s not just your credit score that counts

When you apply for credit, lenders and service providers typically check a number of factors:

  • What you can sensibly afford to repay.
  • Your personal circumstances.
  • Any past account history.
  • Your credit score.

Lender credit scoring – how it works (PDF 69.8kb)

Your eligibility can be affected by a lot of factors

You have a limited credit history

If you’ve got little experience with credit, even if you have a good income, your credit score could be low because there’s little to suggest how well you can manage your finances.

You don’t have regular income

You could have a better chance of being offered credit if you’re employed and/or have a regular income, or have money left over from any disability benefits.

Low disposable income after paying bills

Managing money and bills can be tricky enough, without also having debts to pay off. Lenders will often check what you can sensibly afford, based on your income, outgoings and existing borrowing.

Your past account history

Lenders usually keep records about accounts you’ve held with them in the past, including information about how well they’ve been managed. Things like a history of late payments can affect your eligibility.

A decent credit score can help

Your credit score can paint part of the picture that potential lenders see.

The credit reference agencies that Halifax work with include TransUnion, Experian and Equifax. The information they hold helps us to understand your past experience of using and managing credit.

Things which can affect your credit score include:

  • Moving home regularly.
  • Not being on the electoral register.
  • The amount you’ve already borrowed.
  • A history of arrears, late payments etc.
  • Making multiple credit applications in a short period of time.
  • County Court Judgments (CCJs), Individual Voluntary Agreements (IVAs), and bankruptcy.

What affects your credit score?

You could be able to improve your credit score over time, giving you a better chance of being approved when you apply for credit in future.

How to improve your credit score

Money worries?

If you’re worrying about managing your money or rising living costs, you’re not alone - we’re here to help.

Help with money worries

Want to read more?

Applying for credit

What is a hard or soft credit check?
What is a bad credit score?
What is a good credit score?
Why has my credit score gone down?
What affects your credit score?

Using credit

How to pay for a car
How to pay for a wedding
How to pay for a holiday
How to pay for home improvements

Ways to borrow

Credit cards
Loans
Car finance
Overdrafts
Mortgages

Know where you stand with Halifax

Sign up for ‘Your Credit Score’ to see your rating with TransUnion. It’s free to check and won’t hurt your credit score.

More on Your Credit Score