Denied Credit

Being Turned Down for Credit Does Not Hurt Credit Scores

Dear Experian,

I was told that every time you get turned down for credit that your score goes down. Is this true?


Dear STI,

No, it's not true. Your credit report does not show whether an application is approved or declined. So, being declined has no affect on credit scores.

How Hard Inquiries Impact Credit Scores

When you apply for credit an inquiry is added to your credit report. An inquiry indicates that you have applied to take on new debt, but that debt may not yet appear as an account on your credit report. That potential new debt represents possible risk, so the inquiry can have a negative impact on credit scores.

The impact is generally very small and becomes less significant as time passes.

Payment History Has the Greatest Impact on Credit Scores

If a new account is opened, you clearly have taken on new debt, and how you manage that debt over time will either have a positive or negative effect on credit scores. That payment history will be more important than an inquiry.

Simply because no new account appears does not indicate your application was declined. It's quite possible you simply chose not to accept the loan or credit account.

Thanks for asking.
The "Ask Experian" team