Why might a credit application be turned down?

Although it’s disappointing, there are a few common reasons why a credit application might be unsuccessful.

What lenders look at

Lenders are very experienced at assessing the eligibility of borrowers, typically considering:

  • Your credit score.
  • Any past account history.
  • Your personal circumstances.
  • What you can realistically afford to repay.

Credit scoring – a guide to how it works (PDF 915kb)

Common reasons an application for credit may be turned down

You have a limited credit history

If you’ve little or no experience with credit, even if you have a good income, your credit score may be low, simply because there’s little to indicate how well you’ll manage borrowing and repayments.

You don’t have regular income

You could have a better chance of being offered credit if you’re employed and/or have a regular income, or have money left over from any disability benefits.

Low disposable income after outgoings

Managing money and bills can be hard enough, without also having debts to repay. Lenders may check what you can reasonably afford, based on your income, outgoings and existing borrowing.

Your past account history

Lenders usually keep records about accounts you’ve held with them in the past, including information about how well they’ve been managed. Things like late payments can affect your eligibility.

A good credit score can help

Your credit score may paint part of the picture that potential lenders assess when deciding whether to lend to you..

The credit reference agencies Lloyds Bank work with include TransUnion, Experian and Equifax. The information they hold helps us to understand your track record of using and managing credit, spanning at least 6 years.

Factors which can affect your credit score include:

  • County Court Judgments (CCJs), Individual Voluntary Agreements (IVAs), and bankruptcy.
  • Making multiple credit applications in a short period of time.
  • A history of arrears, late payments etc.
  • Not being on the electoral register.
  • High levels of existing debt.
  • Moving home regularly.

What affects your credit score?

It may be possible to improve your credit score over time, giving you a better chance of being approved when you apply again in future.

How to improve your credit score

Help with money worries

If you’re ever experiencing money worries, please let us know so we can find a way to help.

Help with money worries

Where next?

Know where you stand with Lloyds Bank

Sign up for ‘Your Credit Score’ to see your rating with TransUnion. It’s free to check and won’t hurt your credit score.

More about Your Credit Score