Why Can't I Get Credit in South Africa? 7 Reasons You May Be Declined

Being declined for credit can be frustrating — especially when you don't understand why. You may have a steady income, believe your accounts are up to date, and still find that applications for a loan, vehicle finance, cellphone contract or other credit are being declined.

In South Africa, a credit application can be declined for several reasons. Sometimes the problem is affordability or your payment history. In other cases, information appearing on your credit profile may be outdated, incorrect or simply not what you expected to find.

The important thing is not to keep applying for credit hoping that the next application will succeed. The first step is to understand what may be causing the problem.

7 Common Reasons You May Be Declined for Credit

1. Your Credit Payment History

Your payment history is one of the important factors considered when you apply for credit. Late payments, missed payments, arrears or accounts that have fallen behind can affect how a credit provider assesses your application.

Even after an account has been brought up to date, your credit profile may still contain historical payment information. This is why checking what is actually reflected on your credit reports can be useful before making further applications.

2. You May Still Be Flagged as Under Debt Review

If you have previously been placed under debt review, your credit profile may still reflect a debt review indicator. While that indicator remains in place, obtaining new credit can be affected.

The correct way to address this depends on your individual circumstances and where you are in the debt review process. Being able to afford credit again does not automatically mean that the debt review indicator can simply be removed.

If you are unsure of your current debt review status, the first step is to establish exactly what is recorded and determine which process, if any, is available to you.

3. Your Current Debt Levels May Be Too High

Credit providers do not only look at whether you pay your accounts on time. They also consider whether you can reasonably afford the additional credit you are applying for.

If a large portion of your income is already committed to existing loans, credit cards, vehicle finance, store accounts or other monthly obligations, a new application may be declined even if you have never missed a payment.

This means that being declined does not necessarily indicate that there is something “wrong” on your credit report. In some cases, the issue may simply be affordability based on your current income, expenses and existing debt commitments.

4. Your Credit Utilisation May Be Too High

Credit utilisation refers to how much of your available revolving credit you are currently using. This commonly applies to facilities such as credit cards, overdrafts and store accounts.

For example, if your credit card has a limit of R20,000 and you regularly owe close to R20,000, you are using most of the credit available to you. Even if you make every payment on time, consistently using a high proportion of your available credit may affect how lenders assess your risk.

Reducing outstanding balances and avoiding constantly operating close to your credit limits may help improve the overall picture presented to potential credit providers.

5. There May Be Incorrect or Outdated Information on Your Credit Report

Credit reports are not always perfect. An account may show an incorrect balance or payment status, a paid-up account may not yet have been updated, or information may appear that you believe is inaccurate or should no longer be reflected.

If incorrect information is affecting your credit profile, you have the right to dispute information with the relevant credit bureau. However, information that is accurate cannot simply be removed because it is making it difficult to obtain credit.

This is one reason why understanding what appears across your credit reports can be more useful than repeatedly submitting new credit applications without knowing what may be causing the problem.

6. You May Have Made Too Many Credit Applications

Applying for credit at several different providers within a short period can result in multiple enquiries appearing on your credit profile. Credit providers may take recent application activity into account when assessing a new application.

If you have already been declined, immediately applying at several more lenders may therefore not solve the underlying problem. Rather than continuing to apply, it can be better to first understand why you may be experiencing difficulty obtaining credit.

7. You May Have Limited or Insufficient Credit History

Sometimes the problem is not a bad credit history, but too little credit history. If you have never used much credit, have only recently started using credit, or have very little information recorded on your credit profile, a lender may have less information available to assess how you manage credit.

This can affect people who have always preferred paying cash as well as younger consumers who are applying for credit for the first time. A limited credit history does not necessarily mean that you have done anything wrong.

What Should You Do If You Keep Getting Declined for Credit?

If you keep being declined for credit, the most useful next step is usually to stop applying temporarily and establish what may be causing the problem.

Start by obtaining and reviewing your credit information. Look at the accounts being reported, balances, payment history, debt review status and any other information that could be affecting how a credit provider assesses you.

If something appears to be incorrect, outdated or unfamiliar, it may need to be investigated and, where appropriate, disputed with the relevant credit bureau or credit provider. If the information is correct, understanding what is affecting your profile can still help you decide what needs to change before applying again.

Importantly, there is no legitimate way to simply erase accurate negative credit information or guarantee that a credit application will be approved. The objective should be to identify the actual problem and determine the appropriate next step

Not Sure What Is Affecting Your Credit Profile?

Get Me Out assists South African consumers who are struggling to understand why they may be experiencing credit problems.

Our Credit Report Assessment looks at the information available on your credit profile to help identify possible issues that may require attention. Depending on what we find, this could include incorrect or outdated information, debt review-related issues, paid-up accounts that have not been updated correctly, or other credit profile concerns.

Every situation is different. We first assess the information available and then explain what we believe the appropriate next steps are.

Need help understanding your credit situation?

Contact Get Me Out and let us help you establish what may be holding you back and what your next step should be.

Frequently Asked Questions About Being Declined for Credit

Can I be declined for credit even if I have a good credit score?

Yes. A credit score is only one part of a credit provider's assessment. Your income, expenses, existing debt commitments, affordability, payment behaviour and the lender's own lending criteria may also influence the decision.

How can I find out why I am being declined for credit?

Start by reviewing the information on your credit reports and checking that the accounts, balances, payment information and other indicators reflected there are accurate. If you are unsure what the information means, having your credit profile assessed can help identify areas that may require attention.

Can incorrect information on my credit report be removed?

Incorrect or inaccurate credit information can be disputed with the relevant credit bureau and, where appropriate, corrected or removed following investigation. Accurate information cannot simply be deleted because it is preventing you from obtaining credit.

Can I get credit while I am under debt review?

Consumers who are still subject to debt review generally cannot enter into new credit agreements while the debt review process applies. If you believe you should no longer be reflected as under debt review, your circumstances and current status need to be assessed to determine the appropriate process.

Will Get Me Out guarantee that I will qualify for credit?

No. No legitimate service can guarantee that a credit provider will approve an application. Get Me Out's role is to help identify possible problems affecting your credit profile and explain the appropriate options available based on your circumstances.