First-time Buyers
Third of Brits have faced credit rejection
One-in-three people have been rejected for credit, potentially damaging their credit score and mortgage chances.
Research from uSwitch found 32% of credit applicants had been turned down or could not get the rate they wanted.
This figure rose to 57% when those aged between 18 and 34 were considered.
Each time a person is rejected a ‘footprint’ is left on their credit file, something which could later harm their chances of having a mortgage application approved.
A quarter of young people said they had been turned down five times or more, equating to over a million young people.
uSwitch said many people were unaware when their credit rating could be checked and thus did not understand the consequences of a rejected application.
More than half (54%) of 18-34 year olds did not know their landlords were able to access their credit report with 74% unaware that prospective employers could have access.
David Mann, head of Money at uSwitch, said: “Young people are blindly reapplying for credit again and again but don’t realise the consequences this scattergun approach has on their finances. To break the endless cycle of credit rejections, they need more information about why they’re being turned down and what they can do about it.
“Although it’s disheartening when you’re rejected for credit, it’s important not to reapply straight away but take stock of your situation and find ways to improve it. By checking your credit report before applying or running a soft check with lenders to see if you’re likely to be approved, you can avoid those black marks on your record and build a strong score.”