“Application anxiety” affecting consumers

One third are afraid of damaging their credit score as three in 10 say a high likelihood of approval is important when shopping for credit now

Freedom Finance urges people to use best practice when shopping for credit so they only compare the products they are eligible for

Only three in 10 (28%) said that they would have the confidence to apply again. There was also clear uncertainty and a lack of confidence over what actions many consumers would take next if they did suffer a decline, with a quarter (25%) of adults stating that they wouldn’t know what to do.

“Application anxiety” was most prevalent among younger age groups, perhaps because of a lack of experience in using the credit market and thinner credit files. Six in 10 (59%) people aged 25-34 said that they wouldn’t apply again if they suffered a loan decline, with the majority of this age group (51%) saying the fear of damaging their credit score further would put them off making another application.

The research also found that a high likelihood of approval or acceptance when first starting to shop around for loan products or credit cards was important to three in 10 (30%) adults.

The latest FCA data2 revealed that one in 14 adults (7%) had experienced a rejected credit application over the past 12 months.

Emma Steeley, CEO at Freedom Finance said: “It is concerning that our research revealed such high numbers of people lack the confidence to borrow after a decline. With nearly a tenth of adults in the UK experiencing a rejected loan application over the past 12 months, it is a significant proportion of the population who feel unable to access the market.

“When times are tough and budgets are squeezed, it becomes increasingly important that consumers can access the widest possible range of personal loans and credit cards from trusted providers.”

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