‘Fear of rejection’ stalks millions of UK borrowers

Woman holding mobile phone using smartphone

Media Release
14 December 2021

  • More than one in 10 (11%) say they have been put off from applying for credit products because of the ‘fear of rejection’
  • This rises among the most vulnerable, while many are forced to sell belongings or borrow off friends and family to get by
  • Freedom Finance matches people to loans they are eligible for at the best possible rates


Millions of people in the UK are being put off accessing credit products because they fear a rejected application could harm their chances of a loan in the future, according to new analysis from Freedom Finance, one of the UK’s leading online consumer lending platforms.


The FCA1 data shows that more than one in 10 (11%) of those who held at least one consumer credit product in the last 12 months had been put off by the ‘fear of rejection’. This anxiety rises among potentially vulnerable groups2 , as those who are struggling financially (low resilience – 42%), find it difficult to choose the most suitable financial products (low capability – 17%) or may have lost a job or be struggling with relationship problems (negative life event – 18%) are more affected than most.


Over half (58%) feared the impact of a rejected application with 46% saying it could damage their credit score and a third (32%) saying it could have affected their chances of applying to that provider in the future. While many (48%) simply felt that there was no point in applying. In many cases those fears would have been misplaced as soft credit searches, like the ones used by Freedom Finance, mean that people can check whether they are likely to be eligible for a loan without the damage of a declined application on their credit file. There are also positive steps people who think their poor credit record means they cannot access a mainstream loan can take – such as registering on the
electoral roll – set out in Freedom Finance’s Credit Score Guides.


Q. What put you off applying?

  • There was no point in applying: 48%
  • It could have affected my chances of applying to that provider in future: 32%
  • It could have affected my chances of getting credit elsewhere: 30%
  • It could have damaged my credit rating: 46%
  • I was unlikely to be accepted based on information from the lender or price comparison website: 28%
  • NET: Concern about impact: 58%


Base: All UK adults holding one or more consumer credit or loan products now or in the last 12 months who been put off applying for credit, because they thought their application would be rejected

The analysis also revealed that 7% of people had seen a credit application rejected over the past 12 months. The most vulnerable2 were again most likely to miss out as 14% of people with low financial capability, 29% with low financial resilience and over 11% who had suffered from negative life events, all suffered loan rejections.


As a result, over a tenth (12%) said they had sold something to get by instead of applying for a loan or as result of rejection, while one in seven (14%) borrowed from a family or friend and 5% defaulted on another bill, loan or repayment agreement.


In the past 12 months, Freedom Finance has helped millions navigate money, and get help and access loans with some of the UK’s largest lenders through its award winning financial marketplace. David Hendry, Chief Marketing Officer, at Freedom Finance, said it was up to the industry to make sure that everybody was able to access borrowing products, saying: “The findings show that there are a huge number of people struggling to access the credit markets, and for many the application is a daunting process.


“This is particularly true for people with thin credit files – often through no fault of their own, with circumstances like divorce or living abroad factored in – or with low financial capability. It is vital however that the financial services industry does not pull up the ladder and abandon these people to loan sharks and unregulated lenders.


“Credit plays a vital role for many people and used in an appropriate way can help reduce expensive, drawn-out debt or to improve their wider financial wellbeing.


“Technology allows people to apply for credit with the confidence that they will be eligible for that product, but we have to make sure everyone is able to access the right tools. The industry and regulator needs to make sure that we are taking a holistic view of individuals’ credit profile through open banking, and not blocking people from loans unnecessarily.”

For more information:
Temple Bar Advisory
Alex Child-Villiers // William Barker // Sam Livingstone
Tel: 020 7183 1190
Email: freedomfinance@templebaradvisory.com

Notes to Editor:
About the research
1FCA, Financial Lives survey: https://www.fca.org.uk/financial-lives-survey/resources-library
2 The FCA Financial Lives survey defines four drivers of vulnerability:

  • Resilience: low ability to withstand financial or emotional shocks
  • Capability: low knowledge of financial matters or low confidence in managing money, and low capability in other relevant areas such as literacy or digital skills
  • Health: health conditions or illnesses that affect the ability to carry out day‑to‑day tasks
  • Life events: life events such as bereavement, job loss or relationship breakdown


About Freedom Finance
Freedom Finance is a leading UK consumer finance marketplace providing unsecured personal loans, credit cards, mortgages and other financial products. The company partners with over 200 of the UK’s leading lenders and leading service providers, helping consumers navigate money with it’s proprietary matching platform. Proprietary technology enables Freedom Finance to tailor products specifically for customers to give them clarity, not just choice, by providing them only with the products they qualify for. The Group also delivers consumer financial services for high street brands like Argos, Asda, The Co-Op Bank, RAC, Very Group and many more.