More than nine million adults across the UK were declined for credit in just 12 months, new research suggests.
- One in 20 were declined three times or more.
- Young people, Londoners and parents or guardians the most likely to be turned down.
- Money and Pensions Service says people should “stop, take a breath and reassess” before making any more applications if they’re declined.
A survey of 2,236 adults, carried out by Ipsos on behalf of the Money and Pensions Service (MaPS), showed a fifth (19%) saw their application for credit turned down between April 2022 and April 2023.
One in 20 (4%) said they’d been turned down on three or more occasions.
The results, which included all credit except mortgages, also showed some were more likely to be declined than others.
Those who were refused tended to be younger, with 18-24 year olds (36%) and 25-34 year olds (35%) the most likely. Londoners were the likeliest by location (31%), with residents of the East Midlands (10%) the least likely.
Parents or guardians (30%) were also twice as likely to be declined as those without children (14%).
Asked why, respondents said the main reasons they were given included “poor credit history” (38%), “couldn’t afford the repayments” (28%) and “having too much other credit (19%). Just 10% said they weren’t told why.
Two in five (42%) said a tool showing their chances of acceptance would be useful next time, while 38% wanted tips on improving their credit score. A quarter (26%) would value information on finding alternative forms of credit.
Responding to the findings, MaPS said people should take some time if they’ve been declined for credit. Multiple credit applications can seriously affect both your credit rating and the interest rate you’ll be offered in the future.
It also said that for people looking for borrow to repay other debts or spend on bills and essential living expenses, now might be the time to look closely at your budget and access MaPS’ cost of living guidance.
Available via its free MoneyHelper service, the guidance offers tools like a budget planner and Bill Prioritiser, whilst also signposting to additional Government support.
Jackie Spencer, Head of Money and Pensions Policy at the Money and Pensions Service, said:
“Credit is an extremely useful tool used by millions, but it’s a very important decision and a big commitment. Before taking it out, be certain you have the right product for you and a clear plan for repayment.
“If you’re declined, it’s time to stop, take a breath and reassess before applying again. Short term reactions like multiple applications can bring long term consequences for your credit rating and the interest rate you’ll be offered next time.
“If you need credit for essential costs like food or housing, or to repay other borrowing, it might be time to seek free debt advice. Whatever your circumstances, we have dedicated resources on our free MoneyHelper service and I’d urge everyone to take a look before they borrow.”
-ENDS-
For further media enquiries, please contact the MaPS Press Office on 020 8132 5284 / media@maps.org.uk.
Notes to editors
- On behalf of Money and Pensions Service, Ipsos interviewed a representative quota sample of 2,313 adults aged 18-75 in the UK using its online i:omnibus between 13th – 18th April 2023. 2,236 respondents consented to answer questions about financial products and services. Data has been weighted to the known offline population proportions of this audience for age, working status and social grade within gender and government office region.
- Respondents were asked not to consider mortgages in their responses.
- The ONS estimates that there are 47.9 million 18–75-year-olds in the UK.
About the Money and Pensions Service
Our vision is “Everyone making the most of their money and pensions.”
We offer free, impartial help and guidance on money and pensions via www.moneyhelper.org.uk and 0800 138 7777. The service includes a range of free tools, plus the opportunity to speak to an expert via WhatsApp, phone, email or live chat.
We also co-ordinate the UK Strategy for Financial Wellbeing, working with partners and stakeholders to help everyone find their way forward and build a better financial future.
We are an arms-length body, sponsored by the Department for Work and Pensions and funded by levies on both the financial services industry and pension schemes.
For more information, visit our website or annual corporate plan and strategy.