Quick answer
Ask the lender directly, in writing, for the main reason your application was declined and whether any information could change the decision. Then check your free credit reports, review what documents you supplied, and compare your situation against common decline triggers such as serviceability, credit history, tax debt, trading history and security. Together these usually reveal the real reason.
Key points
- Lenders often give vague reasons unless you ask specifically
- Ask in writing and keep a record
- Your credit report fills in many gaps
- Most declines trace back to a handful of common triggers
- Ask for
- Main reason and what could change it
- Check
- Credit reports, documents supplied
- Then use
- The Decline Decoder
Why decline letters say so little
A typical decline letter is a paragraph long. “Unfortunately your application does not meet our current lending criteria.” It’s not designed to help you. It’s designed to close the file without creating a dispute.
Behind that sentence there’s almost always a specific reason. A credit assessor ticked or failed something. Your job is to find out what, because you can’t fix what you can’t see.
Step one: ask the lender, in writing
Call first if you have a contact, then follow up by email so there’s a record. Keep it short and courteous. Something like:
“Thank you for considering our application. So we can address any issues before we apply again, could you let me know the main reason the application was declined? Was it related to serviceability, credit history, our tax position, our trading history, the security offered, or documentation? Is there any additional information that could change the decision?”
Listing the common reasons makes it easy for them to reply with one word, and more likely they will.
If the decline was based at least partly on information in your consumer credit report, the credit provider should tell you that and name the credit reporting body that supplied it. That’s a strong clue on its own.
Step two: ask your broker, if you used one
If a broker submitted your application, they will usually have had a conversation with the lender’s credit team. Ask them directly what was said, and whether the issue was policy (a rule the lender applies to everyone) or assessment (a judgment about your particular numbers). Our page on when a broker couldn’t place your loan covers what to ask.
Step three: check your credit reports
Order free copies from each of the main credit reporting bodies and compare them. Look for defaults, judgments, late repayment history, and the number and dates of recent enquiries. Also check your business’s commercial credit file if you have a company. Our guide on getting your free credit report walks through how.
Step four: review what you gave the lender
Go back through what you supplied. Common gaps include:
- Tax returns more than 18 months old.
- Missing BAS or an unexplained drop in turnover.
- Statements showing dishonours or overdrawn days.
- No ATO statement when there was a known tax debt.
- A security property with unusual features.
- A vague description of what the money was for.
Step five: match it against common reasons
| If you notice… | The likely reason is… |
|---|---|
| Profit on your last return is low | Serviceability |
| A default or judgment on your file | Credit history |
| Overdue tax or no ATO statement | Tax debt |
| Less than two years trading | Trading history |
| Returns not lodged | Missing financials |
| Unusual property or second position | Security |
| Several recent applications | Credit enquiries |
Our Decline Decoder does this matching for you in a couple of minutes, and suggests which alternative routes fit your answers.
If you’ve done all this and still aren’t sure, send us a short enquiry. Working out the reason behind vague declines is a big part of what we do.
Policy or assessment: why the difference matters
A policy decline means you fell outside a rule. Another lender with different rules may say yes on the same facts. An assessment decline means the lender looked at your numbers and wasn’t comfortable. Another lender might still say yes, but you’ll want to understand what worried the first one and address it.
Knowing which it was tells you whether to look for a different lender, or to fix something first.
Illustrative example: A builder received a one-line decline. When asked, the lender’s assessor said the issue was a court judgment from a supplier dispute. The builder hadn’t known it was registered. He arranged a settlement, obtained confirmation, and applied to a specialist lender with a written explanation.
Keeping a decline log
If you’ve applied more than once, keep a simple record. It helps you see patterns, and it’s useful information for the next lender or adviser.
| Date | Lender | Product and amount | Credit check? | Reason given | Notes |
|---|---|---|---|---|---|
Patterns often jump out once they’re written down. Three lenders citing trading history tells you something different from three lenders citing three different reasons, which can point to a file that simply needs better presentation.
What not to do while you investigate
- Don’t argue with the lender. Polite questions get better answers than complaints.
- Don’t assume the first reason you hear is the only one. There may be secondary issues.
- Don’t reapply to the same lender until you’ve addressed what they said.
- Don’t apply elsewhere just to test the waters. Every application can leave a mark.
The aim of this stage is information. Once you have it, the next step usually becomes clear.
Quick checklist for finding the reason
- Email the lender with the list of common reasons and ask which applied.
- Ask your broker what the lender’s credit team said.
- Order your credit reports from each bureau.
- Review every document you supplied for gaps.
- Run the Decline Decoder with your answers.
- Write the reason down in one sentence.
Found the reason? Let’s talk about what comes next
Once you know why, you can choose the right door. There’s no credit check when you first enquire with us, and your details won’t be sent around to several lenders. A real person reads your story and calls you. Please include whatever reason the lender gave you, even if it was vague, because it helps us match you properly. Start here.
Frequently asked questions
Do lenders have to tell me why I was declined?
For business loans, lenders generally aren't required to give a detailed explanation. If the decline was based on information in your consumer credit report, the credit provider must tell you so and name the credit reporting body. Many lenders will share more if asked politely.
What if my broker submitted the application?
Ask your broker. They often receive more detailed feedback from the lender than you do, and should be able to tell you what the lender's credit team said.
Can I ask for my application file?
You can ask for copies of personal information the lender holds about you under the Privacy Act. That may not include internal credit notes, but it can show what information they relied on.
What does 'outside our credit appetite' mean?
It usually means your business type, industry, size or situation falls outside the kind of lending that lender wants to do. It's often policy rather than a judgment on your business.