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Reason for Declining Credit

Posted: 02 May 2019

3 mins to read

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Having a credit application declined can be frustrating and very embarrassing, but it does not need to be.

Having a credit application declined can be frustrating and very embarrassing, but it does not need to be. According to the NCA you have the right to be given the reasons for the decline in writing. This gives you the opportunity to improve your application before applying again. Remember that credit providers use your credit report as one of the deciding factors whether to loan you money, so you need to make sure that you check your credit score and know what your credit profile looks like.

You can get your free credit report and score at My Credit Check from us, as a leading credit bureau we strive to give you easy access to your credit profile so that you can make informed decisions about borrowing.

There may be several reasons for a credit application to be declined, here they are and what actions you can take to fix them:

Reason Declined:

1.) Possible Fraud; The South African Fraud Prevention Service (SAFPS) has put a fraud alert on your credit profile.

What can I do?
Contact the SAFPS on 0860101248 to investigate

2.) Lack of Affordability; Your ability to make repayments; You cannot afford to support your repayments on your current salary and continue to stick to your budget.

What can I do?

  • Ask what amount you do qualify for, or whether they have a different credit product that can meet your need.
  • Consider asking another person to help you make a joint application or to stand surety.
  • Increase your income or reduce your expenses.
  • Settle some accounts/debts before applying again.
  • Save money to be able to make a deposit.

3.) Your Account Conduct; You have overdrawn an account or not had enough funds to meet a payment with the credit provider in the past.

What can I do?

  • Make sure you have enough money in your account to meet payments.
  • Make payments on time and regularly.
  • Make sure your salary is deposited before your payments are due.
  • Contact your credit provider to make other arrangements if you are unable to pay on time.

4.) A Report from a Credit Bureau; Due to information from a credit bureau, the application cannot be approved.

What can I do?

  • Get your credit report
  • Dispute any outdated, incorrect, or fraudulent information with the credit bureau used by the credit provider.
  • Wait some time and build a more positive credit profile.

*Please note: A Credit Bureau does not make the decision to loan you the money, they only provide the credit provider with information that they can use to decide if they will grant you the loan. It is also important to remember that credit providers have their own credit rules and criteria set by internal policy and procedure, based on their credit risk appetite, so your loan can be declined because you did not meet the provider’s specific criteria.

Make sure that you read up on your Creditworthiness and Affordability before you apply for a loan to avoid the reasons for decline that you are in control of. It is better to take your time to get your finances healthy before applying for a loan, than to have to wait because of a declined application. Check your financial health today with Compuscan’s free My Credit Check.