Why was I declined credit?

There are a number of reasons why a credit provider may reject an application for credit.

Each credit provider has their own lending criteria and these are the basis for their credit decisions. Your loan may have been rejected because:

  • The credit provider may be concerned that you will not be able to keep up with the repayments based on your income and current debts and financial obligations.
  • The amount of money in your savings account/s is not enough to prove that you will be able to meet the loan repayments.
  • The credit provider has checked your credit report and found that you have a default or other negative information.
  • Your employment history. If you are unemployed, change jobs frequently or are working your way through a probationary period, you may not be able to demonstrate you can service your loan.
  • Residential situation – moving house on a regular basis can be a potential reason for a credit application refusal.

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If you have been denied credit it is best not to apply for credit again until you find out why. There are a number of factors that may result in an application for credit being refused, but this depends on the lending criteria of the credit provider. Nevertheless, reasons may include :

  • Level of income and savings to meet the loan repayments;
  • Number of other loans and other financial commitments you have;
  • How secure your employment is;
  • Details on your credit report which can include information such as previous bankruptcy, defaults, serious credit infringements, high number of credit applications and poor repayment history.

If you have been declined credit and the information on your credit report was a factor, the lender, phone or utility company will give you details of the credit reporting body they used.

If it was Equifax, the first step in understanding why your credit report has contributed to you being declined credit, is to obtain a free copy of your Equifax credit report. If you have been declined credit you are entitled obtain a free credit report if you apply within 90 days of being declined and provide evidence that a credit provider has declined your application for credit.

By getting a copy of your Equifax credit report you can better understand what information may have contributed to your application refusal. It is important to check your credit report regularly to ensure it is accurate.

If you believe there is incorrect or incomplete information on your Equifax credit report, it is important that you get this corrected. The information used to generate a credit report is provided by credit providers to Equifax, which include banks, phone and utility companies.

The most efficient way to correct information on an Equifax credit report is to speak directly with the credit provider that the error relates to, and ask that it be investigated and your credit report amended. We have a handy list of common creditor contacts. Alternatively, Equifax can investigate the subjected information via the Equifax Corrections Portal.

Find out more in our Corrections section.

Learn more: Read our "How to correct your credit report" fact sheet