Three reasons you can’t get credit – and what to do about it

Jun 25, 2018

Why do so many people get declined for credit? It all boils down to three reasons which, surprisingly, are actually pretty simple. Get ready for some no-nonsense answers – from the experts at Loqbox.

1. They’re unsure about you.

Any arrears, defaults, substantial debts or missed payments? These will all set off alarm bells for lenders that maybe you can’t manage the responsibility of debt. Being able to show that you can manage repayments of a loan usually requires you getting a credit card or loan but, as many of you may know, with adverse history you won’t be able to do that. It’s a vicious cycle. Thankfully, Loqbox exists, which can help you prove them wrong.

2. They don’t know you

Only basic information about you? You probably come under reason two. Put yourself in a lender’s shoes: the more information they have about you – address history, payment history, being on the electoral roll – the more reassured they’ll be.

You’re what we call ‘thin or no file’. You may be a brilliant borrower, but the lack of data makes it impossible for lenders to tell. The answer is to start filling your file with positive data. Read our blog on making yourself more visible to the credit system to see how.

3. They’re just not into you

None of the above? Rather unhelpfully, you fall into reason three. It’s nothing personal. Credit is a privilege, not a right. And lenders don’t have to lend if they don’t want to. Lending patterns, criteria, risk profiles and scoring models change all the time. Some days you might be what a lender wants, while others you may not be.

Your next steps

You can probably guess which of our three reasons applies to you. If you think you need financial help, Citizens Advice offer great advice for free, and can help you take control of any problems early rather than let them snowball.

The answer is to shop around. If you have a good credit history, chances are you’ll be just what the next lender is looking for. Our blog on using soft searches can help to make sure your applications don’t negatively affect your credit history.

Build your credit score

by saving as little as £20 per month.

Sign up