Ensure you’re not in the credit reject pile this year
Over a quarter of UK credit applicants (25 per cent) have been turned down for a credit card or loan over the last year, meaning almost 4.5 million Brits have risked damaging their credit profile.
Research from moneysupermarket.com reveals how many consumers were knocked back when applying for a credit card or loan and identifies the regions and social groups most affected.
Understanding your credit profile is the most important factor for anyone looking for a new financial product as providers base their lending decisions on a range of different factors. Whether you currently have an excellent credit profile or a less than perfect one, people who apply for multiple credit products, and get rejected, could see a negative impact on their credit file.
Taking measures such as ensuring you are on the electoral register, pay bills on time and have a landline or mobile phone contract are important to show you have a healthy credit profile and can manage debt responsibly. It is also important to understand what sort of products you have a good chance of being accepted for and which to steer clear of if you wish to avoid being rejected.
Kevin Mountford, head of banking at moneysupermarket.com, said: "The decision to borrow should never be taken lightly, but credit cards still have a huge role to play in the nation's finances if used correctly. However, it's worrying to see such a huge number of people being rejected for credit cards or loans, especially as you could avoid being declined by taking the time to research the best card for their needs. Rejected applications can have a damaging affect on your credit score and further reduce the chances of you qualifying for another credit product in the future."
Borrowers in the West Midlands are the most likely to be accepted, enjoying an 85 per cent success rate when applying for credit. Londoners fare the worst, with just 62 per cent of applicants accepted for credit.
Men are more prone to rejection than women with 28 per cent of males admitting to being rejected for a credit card or loan, compared to just 23 per cent of their female counterparts. Also, young people are more likely to be denied credit than more mature consumers. Over a third of credit applicants aged 18-34 (36 per cent) have been turned down, but just 12 per cent of those over 55 have the same problem.
Kevin Mountford continued: "It can be really confusing for consumers to understand how lenders rate their credit profiles and come to a decision on whether to accept or reject a new card application. Because of this, moneysupermarket.com has introduced a credit profiling tool that helps people search and apply for the most suitable credit card for their personal circumstances. It means people can shop around for the right card for them without negatively affecting their credit file."
