Loan Bank of South Africa journal
Ask for the reason a credit application was declined
A declined application can leave you guessing. Was it the credit report, the income, an error or something else? The National Credit Act gives you a right to ask. Readers in Braamfontein can use the answer to decide what to check next, instead of applying repeatedly elsewhere.
By Loan Bank of South Africa editorial · · 2 min read
What you are entitled to ask
Section 62 of the National Credit Act says that, on your request, a credit provider must give you in writing the dominant reason for declining to enter into a credit agreement with you. The same applies when it offers a lower credit limit than you applied for, reduces an existing limit, declines to increase a limit or declines to renew an expiring credit card or similar facility.
If the decision was based on an adverse report from a credit bureau, the provider must also give you, in writing, the name, address and contact details of that bureau. Ask for the reason in writing yourself, and keep a copy of your request and the reply.
Match the next step to the reason
If the reason involves your credit report, request your free annual report from the bureau that was named and read it carefully. If you find an error, dispute it directly with the bureau. If the report correctly shows an unpaid account, the National Credit Regulator points out that paying the debt is how a listing is resolved, and there is no need to pay a third party to arrange it.
If the reason is affordability, the provider has assessed that the new repayments would not fit your income and existing commitments. The regulator's guidance is to reduce existing debt before applying for more. That answer can protect you from an agreement that would have strained your budget.
Avoid filling the gap with guesses
Without a written reason, it is easy to assume the worst or to accept a stranger's explanation. Be wary of anyone who contacts you after a decline offering guaranteed approval or asking for a fee. A declined application is not an instruction to keep trying until someone says yes.
Loan Bank of South Africa does not assess applications or lend money. Asking for reasons is a right you can use with any credit provider, and the answer is yours to keep.
After-decline checklist
Work through these steps in order.
- Request the dominant reason in writing.
- Ask for the credit bureau's details if a report was used.
- Get your free credit report from that bureau.
- Dispute any inaccurate entry directly and for free.
- Review your budget before applying again.