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Reason for decline of credit

Embarrassed because your credit application has been declined? Find out why and what you can do to turn a no into a yes!

Being rejected for credit can be very difficult, especially if you need it for a specific purpose such as paying for school fees or buying a new home. Before you immediately make another application, find out why you were rejected. In terms of the NCA, you have the right to be given the reasons in writing for why your credit application was declined.

Perhaps you have been declined credit because of your current financial position, fraud or missing information. Below different possible reasons for a decline of a credit application have been given, as well as the steps you can take to help you make your next credit application more successful.

Reasons for credit decline

Reason Explanation What You Can Do
Possible fraud There has been a fraud alert from the South African Fraud Prevention Service (SAFPS) on your credit profile.
  • Contact the SAFPS on 0860 101 248 to investigate.
Your ability to make repayments (lack of affordability) Your current income will not support the proposed credit repayments on top of your existing commitments.
  • Ask the credit provider for which amount you do qualify, or ask about different credit products that may meet your need.
  • Consider making an application with anoth- er person as a joint applicant or guarantor.
  • Increase your income or reduce your expenses.
  • Settle some of your accounts/debts before applying again.
  • Save money to be able to make a deposit.
Your account conduct You have overdrawn an account or had insufficient funds to meet a payment with the credit provider in the recent past.
  • Make sure you keep enough money in all your bank accounts to meet your commitments.
  • Make regular repayments and pay all your accounts on time as per your agreement(s).
  • Ensure your salary and other income is deposited into your bank account before payments are due.
  • If you are unable to pay on time, contact your credit providers before payments are due to make alternative arrangements.
A report from a credit bureau Due to information from a credit bureau, the application could not be approved.
  • Contact a credit bureau and obtain your credit report.
  • Dispute any outdated, incorrect or fraudulent information on your credit profile with the credit bureau used by the credit provider.
  • Wait some time and build a positive profile before applying again, as your last delinquency might be too recent.
  • Pay your accounts on time.
  • Only take up credit if you can afford it.

A credit bureau does not make the decision to grant credit; credit providers do. Credit providers use the information provided by credit bureaus together with their own credit-granting policies and industry regulations to determine whether you qualify for credit or not.

Take Note

Credit providers have their own credit rules and criteria set by internal policy and procedure, which have an impact on their decision on whether or not to grant you credit. This is also based on their credit risk appetite. Therefore, your application for credit may be declined because you did not meet the internal lending criteria of the specific credit provider.