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Why is my credit application denied? (Part 1)

Posted: 16 Nov 2015

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Denied credit?

Having your credit application denied can be an unpleasant, even extremely embarrassing experience. Even more so, it can be very stressful if you need money for a specific reason and you need it fast.

Here are some common reasons why you might be unsuccessful in getting credit:

  • You are unable to repay loans (you cannot afford it): Your current income will not support the proposed loan repayments on top of your existing commitments (or expenses).
  • You don’t manage your accounts well: You have overdrawn an account or had insufficient funds to pay an instalment in the recent past.
  • Your credit report has negative information on it: You have a negative report due to the fact that you have not been managing your debt well. Remember, there is no such thing as blacklist – it merely means that your credit report is not favourable to you getting a loan.
  • Your financial situation can improve: Your personal financial situation doesn’t meet the credit providers’ lending criteria, and it is likely you will have difficulty meeting repayments. You should always ask the credit provider why you don’t qualify and what you can do to improve your situation.
  • The application is missing information: There is insufficient information to make a loan decision. Make sure you provide all the necessary information and that it is true and accurate.
  • You might be a victim or perpetrator of fraud: You have been found guilty of fraud. If you are a victim, your personal information has possibly been used to apply for credit, or someone has duplicated your card or ID.
  • You’ve applied for loans at a lot of places in a short amount of time: Each time you apply for credit, the credit provider is likely to check your credit report, which leaves an enquiry footprint on the system. This acts as a warning to further credit providers that you might be desperate or aggressively trying to access a lot of credit at the same time.
Still not sure why your application was denied? Read Part 2.

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