How to apply for credit without damaging your credit record

Chris Torney / 19 July 2016 ( 28 April 2017 )

If you apply for a credit card and get turned down, it could make your chances of being accepted by another lender even more remote.

Whenever you make a formal application for a card, whether you are successful or not, this information is recorded on your credit file.

But if a lender sees that you have made a number of unsuccessful applications within a short space of time, it could well take the view that if its rivals don’t want you as a customer, you should be treated with extra caution.

Discover the top five mistakes that damage your credit report

Reasons for credit rejection

You may be turned down for credit for a number of reasons: one of the most common is that your credit record shows you have a large amount of outstanding debt already, and lenders are concerned you might struggle to repay any further credit.

Alternatively, you may have a damaged credit history, showing missed repayments or even defaults. Or you could be turned down for the simple reason that the address on your application doesn’t match the one on your credit file – if you have recently moved home and have yet to put your name on the electoral register, this could be the case.

Avoiding the credit search ‘footprints’

Whatever the state of your credit record, it is possible to avoid the potential problems of having a “footprint” left on your file by an unsuccessful application. Many lenders now let customers make an informal application to check whether they are likely to be accepted for a card or not.

As part of this process, card providers carry out what is known as a “soft search” of your credit history: this allows them to check for any potential reasons to reject your application but, crucially, there is no official record made of this search.

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Treading softly

Not every credit card firm offers this kind of service, but it is a good idea to begin a hunt for a new card by using the “soft search” approach. If your initial attempt indicates that you might be turned down, it would be a good idea to check your credit record to see what issues might be counting against you.

Each of the UK’s three main credit-reference agencies, Callcredit, Equifax and Experian, let people check a basic version of their records for £2: click the links on each company’s name to apply for your copy.

Get free access to your credit report for 30 days with Experian's trial offer

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The material is for general information only and does not constitute investment, tax, legal, medical or other form of advice. You should not rely on this information to make (or refrain from making) any decisions. Always obtain independent, professional advice for your own particular situation.