Credit declined, now what?

If you have been declined for credit, it's best to not make another application immediately. Rather ask the credit provider why you weren’t given credit and work towards fixing the problem. The main reasons, and their solutions, are discussed below.

Reason: Possible fraud

The South African Fraud Prevention Service (SAFPS) may have spotted something suspicious on your credit profile. Credit providers can’t ignore this and have to wait for the matter to be cleared up.

Steps to take

• Contact the SAFPS on 0860 10 12 48 to investigate

Reason: Lack of affordability

Credit providers are worried that you won’t be able to afford more credit with your current income and existing financial obligations.

Steps to take

• Check with the credit provider if you can qualify for a smaller amount
• Reduce your expenses and try to increase your income
• Pay off some of your existing debt before reapplying
• Save up some cash to use as a deposit 

Reason: Risky credit behaviour

Your credit history shows that you have either overspent or didn’t make a scheduled payment at some point.

Steps to take

• Going forward, always meet your payment obligations
• Always make your payments on time and in full
• Schedule your debit orders to go off after your salary comes in
• Immediately contact your credit provider if you realise you can’t make a payment

Reason: Negative credit report

If the credit bureau report shows negative credit behaviour, your application won’t be approved.

Steps to take

• Get your own copy of your credit report from a credit bureau (you get one free report per year)
• Check the report for mistakes
• Build a healthy credit score while you wait to apply again
• Always make your payments on time

Note

Credit providers base their decision to approve or decline your credit application on the reports they get from credit bureaus. Credit bureaus themselves don’t make any decisions.

Apart from the credit reports, providers also take into account their own policies and procedures.

Ultimately, the way you treat your existing credit will determine whether you are good for more credit in the future.