Whether you are applying for a mortgage, finance for a car or simply need a loan for your wedding or a holiday, being refused credit can be a major frustration. This frustration is doubled when you don’t know exactly why you have been refused. Unfortunately, very often you will not get a clear answer from a lender as to why you have not been granted the credit you are looking for. This might change in the future; a recent poll by Experian suggested that 86% of British people want lenders to give clear reasons for credit refusals and in this age of transparency lenders will surely start to respond at some point. Until then, however, we can be left unclear, so we have compiled a list of the main reasons your application for credit has been refused.

Poor Credit Score

Still the most common reason for credit refusals, lenders use credit scores as a kind of ‘firewall’ before they put your details through their own set of criteria. If you don’t meet the minimum requirements then you won’t be considered. A poor credit score may be due to late or missed payments on previous credit. If you have received a County Court Judgement, this will also count as a black mark against your name. If you’re not sure what your credit score is, you can check for free via Experian’s Free Credit Checker. If your score is not as high as it needs to be, start to look at ways you can build your credit.

Read More: What Credit Companies Consider When Creating Your Score (and What They Don’t)

You’ve Made too Many Applications in a Short Time

It’s worth remembering that a refusal from one lender does not necessarily mean that you will be refused credit by others. However, you do need to be aware that several applications for credit made in a short space of time will damage your credit rating and make lenders less likely to provide you with finance. This is because many applications made in a short space of time give the impression of someone who is short of cash, which in turn doesn’t inspire confidence that repayments will be made.

You Haven’t Borrowed Before

Your credit refusal may simply be down to the fact that you haven’t borrowed before. Even if you have lived within your means for years, if you don’t have a credit history there is nothing to prove to a lender that you are likely to pay them back. This is sometimes called the ‘credit conundrum’ and it can be frustrating for those who manage their finances responsibly to find themselves refused credit. The situation can be easily resolved by creating a few credit building habits. Within six months your credit rating should have improved quite significantly.

You Don’t Fit the Lender’s Profile

Your credit rating might be excellent, your employment secure and yet you may still find yourself refused credit. In this instance it is likely that you just aren’t what that lender is looking for at this moment in time. Credit providers look for different types of new clients at different times. Sometimes they only want low risk borrowers, other times they may actually be looking for clients with a lower credit rating in order to charge higher rates.

There are Mistakes on Your Form (or Your File)

Everyone makes mistakes from time to time, and your credit refusal might be down to a simple human error. Double check your form to make sure that all addresses, your date of birth and everything else are 100% accurate.

The other type of error that could occur is on your credit report itself, and if your score isn’t what you expected you should obtain a copy of your own report from a credit reference agency and look for any anomalies. It might be that information is missing or a payment has been wrongly recorded as late. If you encounter these types of errors you should apply to have them corrected in order to improve your credit rating. Be aware that this won’t happen immediately and you may have to wait for your credit score to reflect the corrections.

You’re not on the Electoral Register

A simple one to resolve this – register to vote at your current address. You don’t actually have to vote if you don’t want to, but providing evidence that you live at a fixed address is one of the simplest and quickest ways to improve your credit score.

You have Access to too Much Credit

Even if you are not currently using any of the credit you are entitled to, if you have access to a large amount of money, lenders might just start to get a bit twitchy. This is especially true if you are applying for a credit card on top of other cards as lender want to guard against the possibility of you maxing out all your cards at once for an extravagant spending spree and being unable to pay them back. It’s a good idea to close any accounts you aren’t using anyway, so check your available credit before making a new application.

Don’t forget – if you are a tenant you can improve your credit score by using Credit Builder to pay your rent. Simply pay your rent as normal every month and the payments will be counted towards your credit rating.

Find out more and sign up free here.