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Why is my credit application denied? (Part 2)

Posted: 16 Nov 2015

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We previously blogged about the common reasons why your credit application might have been denied. Even though this is not a pleasant experience, you shouldn’t ever stick your head in the sand. Rather face the facts and see where you can improve.

Here are some tips on how to come back from a denied credit application:

Reason: You are unable to repay loans (you cannot afford it.) Consider this:
  • Ask the credit provider to reduce the loan amount or extend the term
  • Consider making an application with another person as a joint applicant
  • Increase your income or reduce your expenses
  • Settle some of your accounts/debts before applying again
  • Save up money to be able to make a deposit
Reason: You don’t manage your accounts well Consider this:
  • Make sure you keep enough money in all your bank accounts to meet your commitments.
  • Make loan repayments on a regular basis and pay all your bills on time (according to the credit agreement).
  • Make sure that your salary and other income is deposited into your bank account before payments are due.
  • If you are unable to pay on time, contact credit providers before payments are due to make alternative arrangements.
Reason: Your credit report has negative information on it: Consider this:
  • Get your credit report via www.mycreditcheck.co.za.
  • Give it some time to build a positive profile before applying again (your last delinquency might be too recent).
  • Always pay your debt on time.
  • Only take credit if you can afford it.
Your financial situation can improve:
  • Start savings on a regular basis
  • Re-apply with a guarantor, so somebody that is in a better financial position and can co-sign the agreement with you.
  • Increase your income by taking on another job
The application is missing information:
  • Complete the application again with the missing information.
  • Furnish all necessary supporting documentation like pay slips etc.
Possible fraud:
  • Get a copy of your credit report and check if there are any accounts shown that do not belong to you.
  • Dispute any incorrect/fraudulent information with the relevant credit bureau.
  • Approach the credit provider to discuss a way forward.
  • Report the fraud to the SAFPS on 0860 101 248
You’ve applied for loans at a lot of places in a short amount of time:
  • Plan your applications carefully and spread them out more.
  • Wait some time before you apply again to clear your credit report.

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