If your credit card application is declined

Of course, it’s disappointing for an application to be turned down. In this guide we explain why this happens and how to improve your credit eligibility.

To be accepted for a Lloyds Bank credit card, you must:

  • Be a UK resident, aged 18 or over, with a regular annual income.
  • Be free from County Court Judgements (CCJs), Individual Voluntary Agreements (IVAs) and bankruptcy.
  • Not be a student or unemployed.
  • Not have been declined for a Lloyds Bank credit card within the last 30 days.

Lending decisions are based on a number of factors

Your credit record

Credit reference agencies securely hold information about you and your financial past, using this to issue you a credit score. Lenders can access this information to support their decisions around offering credit.

Affordability

Lenders assess what they think you can reasonably and sustainably afford to repay, based on things like your income and the total amount of credit that's already available to you.

Current and past accounts

Lenders usually hold a record of accounts you've held with them before, including information about how well they were managed.

Your personal circumstances count

At Lloyds Bank, any credit agreement and borrowing amount is subject to an assessment of: 

  • Your current level of borrowing and financial commitments. 
  • Your employment status and how long you’ve held your job. 
  • Your residential status, including how long you’ve lived in one place. 
  • Whether or not you’re on the electoral register. 
  • Whether you have kept up with loan or credit card payments. 
  • The length of time you have held a current account.

The importance of your credit score

In addition to the details provided in your application, lenders access information from and the score issued by independent credit reference agencies, helping them to assess the risk of offering credit.

Things which can negatively affect your credit score include:

  • Declined applications for credit – particularly a number of them in a short period.
  • The level of credit already available to you, even if you’re not using it.
  • The level of existing debt balances in relation to your income.
  • Missed payments or exceeding your credit limits.
  • A short credit and/or repayment history.
  • A history of bankruptcy, CCJs or IVAs.

Check with the credit reference agencies

It’s a good idea, especially if you’re planning to apply for credit, to check that the details held by each credit reference agency is accurate. If it’s not, you could apply to have the information corrected.

Although there are a number of agencies in the UK, Lloyds Bank primarily use:

More about credit scores

At what point were you declined?

  • Although it’s disappointing to be told you’re not eligible, the good thing about eligibility tools is, to make an eligibility decision only a 'quotation' or 'soft search' is completed. 

    Although this will be recorded with the credit reference agencies, it won’t affect your credit score or your chances of being offered credit in future.

  • We do complete a full or ‘hard’ credit search if you submit a full credit application, i.e. not just an eligibility check. If you’re declined at this stage, it is recorded with the credit reference and it will affect your credit score.

    It’s important to know that this could make it more difficult for you to get credit in future, especially if you make a number of full credit applications over a short period.

    If you’re declined, to limit any further impact, you may want to wait at least 6 months before applying again. In the meantime, there are things you can do to improve your credit score and eligibility.

Improving your credit eligibility

It may take some time, but the following things could help to boost your credit score:

 

  • Reduce existing debts – if you focus on repaying what you’ve borrowed already, as well as helping you to minimise any interest costs, the risk associated with issuing further credit will reduce.
  • Close credit accounts – if you have open accounts which you don’t use, and they no longer meet your credit needs, by closing them you could unlock future borrowing opportunities.
  • Manage accounts well – by keeping up with credit payments and staying within agreed limits, over time this indicates you can and will manage financial commitments responsibly. 
  • Register to vote – being on the electoral roll is one way your home address can be validated, which in turn can help to improve your credit score and eligibility. 
  • Address defaults/CCJs – although these will show on your credit record for some time, they may not be viewed as negatively by lenders if they’re marked as ‘settled’.
  • Wait to apply again –if you’ve been declined, you may want to work on your credit score for at least 6 months before applying again.

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Let’s look at the details

  • If you’ve never had, or have very limited experience with credit, lenders will find it difficult to assess how well you’ll manage it. In turn, you’re less likely to get the lowest and longest lasting interest rates, or be approved for credit at all.

    If you’re in this situation, there are additional things you can do to boost your credit profile:

    Apply for a ‘credit builder’ card – it may seem obvious, but starting small and building towards the credit card you ultimately want may be a sensible step. Although they usually offer lower credit limits and higher interest rates, by using a credit builder card and repaying your balance responsibly, your credit score will slowly increase.

    Use a bank account – setting up Direct Debits to make regular payments, e.g. for things like utility bills, can contribute to your credit score over time. Just make sure there’s money in your account to cover any payments, or you could find your credit score is negatively affected.

    If your account has an overdraft, managing that effectively will also help.

    Carefully manage commitments – keeping up with payments on store cards, services like your mobile phone contract or TV subscriptions, and other household bills, could all help to boost your credit score. You’ll need at least 1 account offering you credit of some description, for a period of 6 months or more, to generate a credit score you can build upon.

  • Joint financial commitments, like bank accounts, mortgages and even utility bills, create a link between you and your partner. Even if the joint accounts themselves are managed well, if your partner’s credit score is low, that could also impact yours and your ability to get credit.

    It’s worth working to improve both of your individual credit scores, or trying to keep your finances separate, to increase your overall chances of being approved for credit in future.

  • If you’ve just been declined, it’s unlikely that you’ll receive a different result if you apply again with the same lender within a 6-month period, unless of course there’s been a significant change in your personal circumstances. Especially if it was a full credit application you submitted, you simply risk damaging your credit score further.

    Different lenders have varying lending criteria, so being declined by one does not mean you’ll be declined by all, but multiple applications in a short period will affect your credit score and chances of being accepted, which is something to be aware of.

    If you’ve been declined in the past and you’ve put effort into improving your credit record, the last thing you want to do is damage it again.

    To help you avoid this, many lenders now provide an eligibility checker to help you to find and compare cards you’re likely to be accepted for, without impacting your credit score. The Lloyds Bank version is called One Check.

  • Lenders have access to a lot of information to support a fair and considered decision making process, but you can ask for more information or appeal a decision if you wish, particularly if you’ve got additional information which may support your application.

    To query a credit card, loan, bank account or overdraft decision made by Lloyds Bank, please write to: 

    Personal Lending Decisions
    Three City Park
    The Droveway
    Hove East Sussex
    BN3 7AU

    Make sure you include copies of any supporting information, along with contact details so we can get back to you, including your full name and address.

    It’s important to know, we may need to complete a credit search to review your application, in which case this would be recorded on your credit file:

    For credit cards, we’ll review recent One Check/eligibility results first. If a search wasn’t completed when you originally applied, then we will complete a hard credit search when you appeal.

    For loans and overdrafts, we’ll review any recent credit searches first. If a search wasn’t completed when you originally applied, then we will complete a hard credit search when you appeal.

Key points about declined credit applications

  • You must be a UK resident aged 18 or over to apply. Lending decisions are based on information you provide, your credit score, an affordability assessment and any information held about current and past accounts.
  • If you’ve only completed an eligibility check, this won’t affect your credit score.
  • If you’ve submitted a full credit application, this will affect your credit score, so it’s a good idea to wait and work to improve your credit score before applying again.

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