Consumers paralysed by “application anxiety” after credit declines
Millions of people in the UK are suffering from “application anxiety” following a declined credit application according to new research from Freedom Finance, one of the UK’s leading digital lending marketplaces.
They found that nearly half of UK adults (46%) wouldn’t apply for credit again if they suffered a declined rejection for a personal loan or credit card. Over a third (36%) said they wouldn’t apply again was because they were afraid of further damaging their credit score, while a quarter (25%) of adults said that they wouldn’t know what to do if they were declined.
“Application anxiety” was most prevalent among younger age groups, where six in 10 (59%) people aged 25-34 said that they wouldn’t apply again if they suffered a loan decline.
After the latest FCA data found nearly one in 10 had experienced a rejected credit application over the past 12 months, Emma Steeley, CEO at Freedom Finance, commented: “It is concerning that our research revealed such high numbers of people lack the confidence to borrow after a decline,” she said. “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.”