Applying for credit

A credit score is a prediction of how likely you are to pay back any money you borrow using a credit product like a credit card, loan or mortgage.

In the UK there are three main credit reference agencies that collect information about you from public records, lenders and service providers. Using this information, each credit reference agency creates a credit score (and other risk metrics) that can be used to work out how much you could borrow and your ability to pay it back.

Your credit score will change over time in line with your circumstances, and each credit reference agency credit score for you may be slightly different. The higher your credit score, the more likely you are to be accepted when applying for credit.

Lenders will use your credit score alongside other information like your past account history, the amount of credit you already have open, your income and your regular outgoings, to decide whether you’re eligible for credit. Managing your finances carefully makes a big difference to your likelihood of being approved.

For more on credit scores, see our business credit score and personal credit score articles.

Common reasons you may have been refused credit include:

• your credit score is too low
• you have a poor credit history based on how you managed previous accounts
• you’ve applied for more credit than the lender thinks you’ll be able to repay
• something in your credit file suggests fraudulent activity
• the lender’s lending criteria disqualifies you – for example setting a minimum income to qualify for credit

Lenders can tell you which credit reference agency they used, so you can approach them directly to see your credit file. 

Firstly, check your credit record with at least one of the credit reference agency to verify the information they hold on you. You have the right to get one free copy of your credit report each year.

If you see something that’s not right, you can contact the credit reference agency, tell them what’s wrong (preferably with supporting evidence) and ask them to update their files.
 
Once you’re sure all the information they hold about you is correct, you can take the next steps towards improving your rating.

• Reduce existing debts. Reducing your outstanding credit and the amount you have to pay in interest and repayments reduces your credit risk to lenders.
• Consolidate your credit. Closing any accounts you don’t use and consolidating your debts into one can reduce your repayments and improve your credit rating.
• Manage your accounts properly. Meeting all your financial commitments on time and staying within your agreed credit limits shows you are financially responsible and will improve your credit score over time.
• Register to vote. If you’re not already, registering on the electoral roll helps lenders and credit reference agencies confirm your personal information, which improves your credit score.

Spend at least six months working on improving your credit score before you apply again.

To get more advice on what to do if you’ve been refused credit, you can go to MoneyHelper. MoneyHelper is an independent charity offering free help with money, including in-depth tools and guides. 

We offer credit products for both individuals and businesses that could help improve your credit score as long as you use them properly.

Creditbuilder
Creditbuilder is an Activeplus bank account add-on. If you’re new to the UK, don’t have much credit history or want to improve your credit score, Creditbuilder can help steer you in the right direction.

Find out more

Business Creditbuilder
Zempler Business Extra and Pro account holders can take advantage of Business Creditbuilder. If you’re a new business or have missed a payment or two in the past, you could use it to give your company credit score a boost.

Find out more

It’s important to remember that you’ll only improve your credit rating if you make all your Creditbuilder payments on time. 

Paying late or missing a payment could harm your credit rating, as we’re obliged to report negative as well as positive information to the credit reference agencies. 

Harming your credit rating could make it harder to get credit in the future. 

To be eligible for a Zempler Bank overdraft you need to have had a Zempler Bank Account open for at least three months. We’ll let you know once you’re eligible to apply by email, SMS, Online Banking message or in-app.
 
You can see how likely you are to be approved for an overdraft with our eligibility checker. Using the eligibility checker won’t impact your credit score or guarantee you’ll be approved for an overdraft. You must receive an overdraft offer to be eligible to apply. 
 
To apply log in to the Zempler Bank app or Online Banking, go to ‘Add-ons’ in your Account Overview and follow the instructions.  
 
You’ll need to read and accept your Credit Agreement and Terms. 
 
Before you apply, you can work out how much it will cost using our overdraft calculator.