Almost seven million applications for credit were turned down in the last year, research by the Debt Advisory Centre has found.
The most rejections were for personal loans where 1.6 million people failed in their application. Credit cards were also high on the list, with over 1.2 million rejections in a single year.
This was followed by 0.9 million people being rejected for an overdraft and 0.7 million failing a payday loan application. First mortgage, remortgage, secured loans and car loans were each rejected in 0.6 million of cases.
But credit applications aren’t the only place where a poor credit rating can be a problem. In an estimated 7.3 million cases, people’s credit reports held them back in other ways, from getting a job (1.1 million) to opening a bank account (2.3 million).
The research also found that nine million people avoid applying for goods and services because they’re worried about failing a credit check.
The older people get, the less they seem to worry about their credit rating. While 25 per cent of the 18-24 year-olds said they avoided applying for credit or other services because they were worried about failing a credit check, just 11 per cent of people in the 55-plus group said the same.
“Credit ratings are a major part of modern life,” said Ian Williams of the Debt Advisory Centre. “These figures show just how much a poor rating can get in the way, and not just when you’re applying for credit.
“So while it’s good that people are wary of damaging their credit rating even further, what’s even more important is taking steps to improve it, for example, avoiding further borrowing, trying to clear the debts that you can, and setting up direct debits to make sure the payments go out on time.”
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