11 Jun Have a High Credit Score, But Still Rejected? Here’s Why

Posted at 16:52h in Latest News by

Have you ever applied for a loan or credit card and been rejected, even with a great credit history and score? There are numerous reasons that this could have happened, including:

  • A short credit history
  • Too many enquiries
  • Associated with someone with bad credit
  • Missing or incorrect information on credit report
  • Being unemployed or earning below the minimum income threshold
  • Having too big of a debt burden
  • Unstable employment history
  • Unpaid debt or old derogatory marks

Read on to discover the potential reasons you could have been rejected for a loan or credit card and what to do about it.

Why You Were Rejected for Credit

Here are the most likely reasons you were rejected for credit.

Short Credit History

Lenders like to see that you have experience managing credit responsibly. This can seem like a catch-22, especially for credit newbies: you need credit to build a history, but you need a history to get credit. To reduce your credit further dipping, be sure to minimise hard enquiries and only perform soft enquiries until you’re sure you’re in the clear.

Too Many Hard Enquiries

Too many hard enquiries in a short amount of time illustrates that you’re desperate for credit, and therefore an unstable or unreliable lending prospect. Instead of applying for multiple loans or credit cards at once, apply for one, and then if you’re rejected, work on building credit. Perform soft enquiries with the bureaus (you’re allowed one free from each every year) until you’re positive you’ll be accepted. You can check your credit without hurting your score with this free online credit checker.

Unemployed or Low Earner

Some lenders have a minimum income requirement you need to meet for them to loan you money. A lot of lenders also like a solid employment history– a stable record of you holding down jobs long-term.

Too Much Debt

Banks and lenders get nervous if they see you’re heading toward bankruptcy. Using a collections agency and pursuing legal action is a hassle and unpleasant for everyone involved (except the lawyers). Creditors are unlikely to lend you money if you have a stifling amount of debt already or a mountainous debt-to-income ratio.

Derogatory Marks

If you have unpaid debt or derogatory marks (even if they were more than 5 years ago), lenders might be hesitant to loan you funds. Some creditors have no-bankruptcy policies for instance– even if you were bankrupt ages ago.

Have a high credit score, but still rejected?

If you have derogatory marks on your credit report, let us get them off for you. We help South Africans clear debt review flags, judgments, and other bad marks off their credit reports in as little as 21 days. Get in touch now to start your journey to better credit.