What to do if your application has been declined

Woman sitting at an open laptop looking at her phone with concern

While a rejected application is understandably frustrating, unfortunately we can’t tell you exactly why your application has been declined.

In this article we’ll share what we look for when assessing applications, some of the most common reasons why applications get declined and what you can do next.


Our application process

Lenders typically assess two key things when making a decision on an application: affordability and credit risk. Put simply, lenders like to know you can comfortably afford your repayments and that you have a strong track record of doing so.

Here at Novuna, we abide by a strict scoring system and only lend money to customers who are best suited to our loan products. This protects and supports our customers, whilst also allowing us to keep our rates competitive.


Why has my application been declined?

Lenders consider a variety of factors when assessing loan applications, and rarely ever disclose their assessment criteria. Every lender has their own application process and criteria, too, so it’s extremely difficult to pinpoint exactly why your application was not successful.

However, you may find it helpful to look over some of the most common reasons why loan applications are declined and see if any of them resonate with you.

  • You don’t meet our eligibility criteria
  • You’ve missed payments or made late payments in the past
  • You have a high level of existing debt, or borrow close to the maximum limit on your credit cards each month
  • When you use an online credit score checker, your score is low
  • You’ve applied for credit a lot in a short space of time
  • Your income fluctuates frequently
  • You might struggle to afford the monthly repayments on your current income
  • You have a thin credit file
  • There’s incorrect information on your credit report
  • You made a mistake on your loan application form
  • There’s possible fraudulent activity on your credit report
  • You’re not registered on the electoral roll
  • You’re financially associated with someone with a poor credit rating
  • You have recently moved, and your current address is not updated on all your active credit accounts
  • You’ve applied for a loan with us in the last 6 months

Do you believe you have a good or excellent credit score and yet your application has still been declined? Our article on why your application might have been denied might be helpful to you.


What should I do next?

A declined application can come as a bit of a shock but it’s important not to take it personally. The decision is in no way a reflection on you, and there’s plenty of things you can do to improve your chances of being accepted next time.

1. Check your credit report

There’s no doubt that the information on your credit report can impact the outcome of a loan application. Any mistakes or inaccuracies – even something as small as a typo – can have a knock-on effect and should be rectified as soon as possible.

Make sure you get a copy of your credit report from all three credit reference agencies (Experian, Equifax and TransUnion) and have a good look over them. If you spot any incorrect information, however seemingly insignificant, report it to the credit reference agency as soon as possible.

2. Research your other options

You may wish to apply for a loan with a different lender, who may perhaps have different application criteria.

Remember that every full application will leave a footprint on your credit report, though. Multiple applications in a short space of time could indicate money worries, which may be a red flag to lenders. Look out for free eligibility checkers, as some lenders allow you to see whether or not you’ll be accepted with no impact on your credit file.

There are other borrowing options out there, too, such as taking out a secured loan or using a credit card. Consider the pros and cons of these options carefully and speak to a qualified financial advisor if you need a bit of extra help making a decision.

3. Continue to demonstrate good money management

It’s so important to repay any money you owe consistently, as missing or making late payments can have a detrimental impact on your credit score and will stay on your credit report for six years.

If you are struggling to keep up with any debt repayments or essential expenses, you may find it helpful to contact a free debt advice service such as StepChange.

4. Review your existing income and expenditure

Lenders want to know you can comfortably afford to pay back what you owe. If you’ve been declined for a loan, it’s a good idea to take a look at what money’s coming in versus what money’s going out each month.

You may find that you have a high debt-to-income ratio, in which a large proportion of your monthly income is swallowed up by existing debts. Or perhaps you borrow up to the maximum credit limit across your credit cards.

You could get your finances back on track by finding ways to manage your budget, save money or pay down existing debt before reapplying for additional credit.

5. Try to improve your credit score

The information on your credit report is ever-changing, so you constantly have the opportunity to try and improve it. For example, you may wish to get on the electoral register, improve your credit mix, lower your credit utilisation or submit a notice of dissociation.

Our guide on how to improve your credit score could help you to get started.

6. Resume your search for credit once your circumstances have changed

If your credit application is unsuccessful, you may wish to wait until your circumstances have changed before applying for a loan again. Perhaps you need a bit of time to pay down existing debt, or you’re waiting to start a new job.

We’d love to hear from you again after six months, so please do keep in touch with Novuna Personal Finance and keep us in mind if you’re looking for a loan in the future.


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Novuna Personal Finance is a brand of Mitsubishi HC Capital UK PLC. Other brands under which we trade include Novuna Consumer Finance, Novuna Vehicle Solutions, Novuna Business Finance and Novuna Business Cash Flow.

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Written by

Sophie Venner

Sophie Venner is a Yorkshire-based content writer specialising in crafting content for the financial services industry. She’s written over 300 articles on finance, but she’s covered everything from insurance to digital marketing trends. Her content has been featured in the likes of Semrush, Digital Marketing Magazine and Insurance Business. In her spare time, you won’t find Sophie far from a notepad and pen as she squirrels away trying to write a novel.

Wednesday 3rd July 2024