Does being declined hurt credit?

When it comes to getting personal loans, there’s a common concern: does being declined hurt your credit? Getting declined for a credit card or loan does not always directly hurt your credit score. However, there are factors to consider that could indirectly impact your credit health.
Whenever you apply for credit, the lender may review your credit report, resulting in a hard enquiry. These enquiries can cause a slight drop in your credit scores and remain on your credit report for two years. This could happen whether you’re approved for or denied the loan.
While getting declined may not directly hurt your credit score, it’s still a good idea to manage your credit applications wisely. Too many hard enquiries within a short period of time can have a cumulative negative effect on your credit scores.
If you’re declined for credit, assess the reasons why you might have been denied and try to address them before applying for another loan. There are steps you can take to improve your chances of being approved in the future.
Lenders prefer a history of responsible repayment. If you have missed payments, regularly max out your credit cards, or have other negative information on your credit report, it could impact your chances of approval. Work on building a good borrower profile before applying for credit.
It’s also recommended to review your credit reports regularly for errors and dispute any inaccuracies you find.
At SocietyOne, we understand the importance of credit health. That’s why we offer a Credit Score Tool that allows you to check your credit score and eligibility before impacting your credit score. We’ve helped thousands of everyday Aussies access funds for a wide range of needs, and more importantly, our customers love and trust our services.
And remember, getting a rate with us won’t impact your credit score, so it’s safe and obligation-free. Let SocietyOne help you make better decisions for your financial goals.