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Kept in the dark over credit card rejections? You’re not alone

Blackboard with words reject and approve written in chalk

When you apply for a credit card, it’s frustrating to get turned down. And now our latest investigation finds many providers are adding insult to injury by failing to help people understand why they’ve been rejected.

Have you ever been turned down for a credit card and been left guessing why? If so, you’re not alone. After hearing from numerous people whose experiences of applying for a credit card had left them confused and frustrated, we decided to investigate.

We surveyed a sample of 2,013 people about their experiences of applying for a credit card in the past two years. Nearly half of those who have been turned down said they were dissatisfied with the way the company handled their rejection, while just under a quarter said they were ‘very dissatisfied’.

Rejected applicants left in the dark

When we asked unsuccessful applicants why they felt dissatisfied, poor communication and a lack of advice on how to solve the problem were commonly highlighted.

Eight in 10 rejected applicants struggled with the lack of information provided with their rejections, with half receiving a generic message telling them to ‘check their credit file’. And three in 10 said they were told nothing at all!

The Consumer Credit Act says that if a credit application is rejected based on information obtained from a credit reference agency, the creditor must tell the borrower. The creditor also has to tell the borrower which agency they used, however, they don’t have to provide any further information.

Help borrowers help themselves

At Which?, we want lenders to give a reason when credit applications are refused, as well as practical steps that borrowers can take to improve their chances of being accepted in future.

We also think people should be able to shop around for credit without being penalised. So we want all companies to use quotation searches, allowing people to see whether they may be accepted without a full application footprint being left on their credit file.

Do you think lenders have a duty to provide full reasons for rejections? And if you’ve been turned down for a credit card, were you happy with the level of information provided by the company?

richard says:
20 July 2013

I had eleven credit cards applied for all accepted – I had a good job with good wages – I found them difficult to keep track off – so reduced it to one credit card and one debit card – this made ir easy to “not forget” small debits – I now always pay on time

peter hudson says:
20 July 2013

My partner was refused because the Post Office is using 15 years out of date county names. We live in Denbighshire / postal address Flintshire but the post office are still issuing data bases using Clwyd which was abolished 15 years ago! We got an explanation & it was settled. We try to avoid using county names now giving only the post code.

Alan says:
22 July 2013

I had an MBNA card then applied for a Virgin one when they were a new provider several years ago. Not only was I rejected for the new card but because the Virgin one was run by MBNA, my existing credit card had its credit limit reduced by MBNA because I had applied. Very unfair and not a good impression or result for customers!!!!

Phil B says:
24 July 2013

I now have 2 cards which I use and pay off each month, but was previously turned down by Sainsbury’s credit card due to my level of unsecured debt. I have none. If they can’t get that right what else will they get wrong.