Getting a "Computer says no" rejection screen when applying for a credit card or loan is incredibly stressful. Your immediate instinct might be to try a different lender. Do not do this.
Applying for multiple credit products in a short space of time is the worst thing you can do. Each rejection leaves a hard search on your file, making you look desperate and guaranteeing further rejections. Here is what you must do instead.
Step 1: Stop all applications
Put a complete freeze on any new credit applications for at least three months. Give your credit file time to breathe and let the recent hard search age slightly.
Step 2: Ask the lender why
Under the UK Data Protection Act, you have the right to ask the lender which credit reference agency they used to make their decision. They will not tell you exactly why you were rejected, but knowing which agency they checked is the crucial first step.
Step 3: Check your statutory report
Download your free statutory report from the agency the lender used. Look for the red flags that triggered the rejection:
- Are you missing from the electoral roll?
- Is there a default or CCJ you did not know about?
- Is your credit utilisation above 50%?
- Is there a financial association with someone who has bad credit?
Step 4: Fix the root cause
If you find an error, dispute it immediately. If your utilisation is too high, focus all your spare cash on paying down your balances. If you have a thin file, look into getting a credit builder card (using a soft-search eligibility checker first) to start proving your reliability.
Only once you have identified and fixed the root cause should you consider applying for credit again.