How lenders decide whether to accept you

A credit score is a number that summarises what is on your credit report, but it is not the whole of a lending decision. Credit scoring is a system creditors use to decide how much of a risk it is to lend to you, and each creditor sets its own threshold: if your score falls below that threshold, the lender may refuse you, or agree to lend but charge you more¹. Alongside the score, lenders run an affordability assessment, looking at your income, your regular bills and spending needs, and your credit file for details of your existing debts².

So the answer to "does my credit score determine eligibility" is no, not on its own. A lender weighs the credit score, an affordability assessment and the loan requirements, such as the amount, the term and the purpose, as the key criteria for its decision². Two lenders can reach different answers on the same application because each sets its own acceptance policy and its own scoring rules, and each may weigh the same facts differently.

Credit score is only one part of the decision

Credit scoring is a system used by creditors to decide how much of a risk it is to lend to you. Creditors set a threshold level for credit scoring, and if your score is below the threshold they may decide not to lend to you, or to charge you more if they do agree to lend¹. That threshold is the lender's own, not an industry-wide cut-off, which is one reason a score that wins acceptance at one lender is refused at another. There is no shared credit blacklist: each firm scores the same credit file data against its own rules.

The score itself is only one input. TSB describes the credit score, an affordability assessment and the loan requirements, such as the amount, term and purpose, as the key criteria for a lending decision². The affordability assessment looks at your whole financial situation rather than just your history, and it has become more common for lenders to take this approach when calculating how much they will lend you⁷. In practice that means a spotless file can still be refused if the numbers say the repayments do not fit, and a blemished file can still be accepted if the income and outgoings add up.

Each credit reference agency works in a slightly different way, and every lender looks at the data differently too, so it is worth checking your report with all three agencies if you can before applying⁸. The three agencies are Experian, Equifax and TransUnion, and your score can differ between them, which is covered in why your score differs between agencies. If you are refused, the page on what to do if you are refused credit sets out your next steps, including asking the lender why.

Income, employment and other checks lenders make

The affordability assessment starts with your household budget: lenders usually ask about your income, your regular bills and your spending needs, and then check your credit file for details of your debts³. A Financial Ombudsman case study of a payday loan complaint shows what this looks like in practice: the lender had carried out a credit check before offering the loan and had asked about the borrower's income and general living costs, including housing expenses, bills and outstanding credit⁹. The ombudsman's role in those cases is to ask whether the checks were reasonable, not whether they were perfect.

The checks reach beyond credit itself. Some employers run credit checks on new or existing staff, usually in legal services, financial services, property conveyancing and accountancy, so what is on your file can affect a job application as well as a loan one¹⁰. Landlords and letting agents also check what they think you can afford by looking at your income and credit score when you rent from a private landlord¹¹. For mortgages, a lender bases the application on several things including your credit file, the value of your house, and how much you want to borrow¹².

Age and income shape the assessment too. A lender looking at a mortgage into or beyond retirement looks at your age and what your income will be, and may need details of your retirement income¹³. The general rule across the market is that all lenders must check your creditworthiness and satisfy themselves that you can afford the repayments before lending you money¹⁴. What counts as reasonable checks varies with the size and type of the loan: a small short-term loan and a large secured mortgage are not checked in the same way, but both start from the same duty.

Affordability: lenders must check you can repay

The duty to check affordability applies across the credit market, not just to mortgages. Any lender regulated by the Consumer Credit Act must complete affordability checks³, and payday lenders in particular must satisfy themselves that you can afford the repayments¹⁵. Short-term lenders need to complete reasonable checks to make sure you can afford to repay a loan before agreeing to it¹⁶. For guarantor loans, lenders need to make sure the borrower can afford the repayments without too much trouble, and if the loan is later complained about as unaffordable, the lender must show what checks it did¹⁷.

The checks do not stop at the point of sale. Lenders should take the same steps when they extend a credit agreement or refinance an agreement, so a top-up loan or a refinance should be affordability checked as if it were new lending³. Buy now pay later is now in the same framework: since FCA regulation of BNPL began on 15 July 2026, lenders need to check whether you can afford to repay before you take out an agreement¹⁸, and for anything bought using BNPL a lender will carry out a credit check to make sure you can afford the repayments¹⁹.

What "affordable" means has also deepened over time. The Office of Fair Trading, whose regime the FCA took over, required lenders to complete a "borrower-focussed" assessment of affordability, in addition to creditworthiness assessments, to see if the prospective borrower could have afforded to repay the lending in a sustainable manner²⁰. The proposed approach to regulating buy now pay later goes further still, asking lenders to make a reasonable assessment of not just whether the consumer will repay, but also their ability to repay affordably, and without this significantly affecting their wider financial situation²¹. In plain terms, the question is not only "will they pay?" but "can they pay without being pushed into hardship?"

For mortgages, affordability is stress-tested as well as measured. The Financial Policy Committee has said lenders should assess whether borrowers could still afford their mortgages if rates were to rise by 3 percentage points²². That is why a lender may offer less than the income multiple you expect: the assessment has to survive a rise in rates, not just today's payments.

Each lender sets its own acceptance policy

It is up to mortgage lenders to set their own policies about whether they will accept a mortgage application²⁴, and the same is true across credit generally: the threshold, the scoring rules and the appetite for risk are each firm's own. This is why being refused by one lender does not mean every lender will refuse you, and why an eligibility checker can only indicate, not promise, an outcome.

The differences show up most clearly with poor credit histories. If you have a bad credit history, some high-street banks may refuse to give you a mortgage outright, while building societies and specialist lenders can be more flexible, though specialist lenders often charge much higher rates and require larger deposits²⁵. Someone with a debt management plan can still get a mortgage, but the decision rests with each lender's own policy rather than a single rule²⁴.

Credit unions sit slightly apart from the rest of the market. The standards applied to credit union loans, for example the level of checks a lender may have needed to do before lending, will typically be lower than those imposed on lenders and loans covered by the FCA's CONC sourcebook²³. That reflects the different scale and nature of credit union lending rather than a gap in protection, but it is a real difference in how the decision is made.

Credit limits: how lenders set and raise them

A credit limit is set by the same combination of scoring and affordability as the original decision. Payday lenders must check your creditworthiness before they give you a loan, roll over a loan or increase the amount of credit¹⁵, and the same principle of re-checking before extending credit runs through the market. A limit is not a one-off judgement: it is the lender's current view of what you can handle, and it can move in either direction.

Limits can also be the vehicle for a rate change rather than a balance change. The Financial Ombudsman has reported on periods when credit card companies made substantial increases, sometimes by as much as ten percentage points, in the rate of interest charged²⁶. Those complaints led to rules on how rate rises must be handled, and the ombudsman continues to look at whether a lender treated a customer fairly when changing terms.

Your right to refuse or reduce a credit limit

FCA rules give you control over limit increases. The rules require a firm to permit a customer at any time to reduce or decline offers to increase the credit limit, and to permit a customer to decline to receive offers of credit limit increases⁴. So an offered rise is exactly that, an offer: you can turn it down, ask for your limit to be lowered, or ask not to receive such offers at all.

There is a parallel right when a computer says no. If a lender refuses you credit because it worked out your credit score just by using a computer, you can ask it to review the decision, and the review must be carried out by an employee of the lender⁵. This matters because automated scoring can weigh factors a human would treat differently, and a human review can take account of what the score cannot see. If your file contains context the score misses, a notice of correction of up to 200 words explaining why you got into debt can be added to your report²⁷.

Rules lenders must follow once you have credit

The decision to lend is the start of a set of continuing duties. For mortgages, the law says lenders must treat you fairly and take your circumstances into account, and they must send you regular statements to keep you informed about your current arrears position²⁸. The FCA's Consumer Credit sourcebook, CONC, says a lender must have clear policies in place for customers who are in arrears and particularly vulnerable, including customers who have mental health difficulties²⁹.

The FCA also expects lenders to ensure that information with respect to customer vulnerability is kept up to date³⁰, so a vulnerability you disclose is not filed once and forgotten. Where a firm delivers poor customer outcomes, the FCA has said it will in some cases consider asking firms to stop lending³¹. And in specific schemes the ombudsman's scope follows the rules: for complaints about motor finance commission, the ombudsman can only look at whether your lender followed the FCA's motor finance redress scheme rules³².

If you fall behind: forbearance and extra support

Forbearance means a creditor agreeing to pause or reduce payments while you sort the debt out. Forbearance requirements mainly apply to consumer credit debt, such as bank accounts, credit and store cards, personal loans, catalogues and car finance³³. It is not an option with priority debts such as fines, court judgments or decrees, rent arrears, council tax arrears and child maintenance arrears, which need a different approach³³.

Most creditors provide forbearance when you let them know you have had debt advice, or that you are planning to get debt advice³³. Free debt advice is available from charities and services including StepChange, National Debtline and Business Debtline, and the debt guide sets out the options. For mortgages, if you are behind with your payments the lender may arrange a forbearance agreement with you, which allows you to repay any missed payments³⁴. A lender may also agree to give you more time to repay, especially if you could get a lump sum from things like compensation, an inheritance, selling your home, or savings and investments¹³.

Extra support exists for people whose mental health and debts interact. People with mental health issues are three or more times more likely to have problem debt, according to the Scottish Government's review of evidence on the cost of living crisis³⁵. Creditors can agree support including a hold on your account for a short period, contact only at set times, certain contact methods only, extra time to gather information, agreeing not to pass the debt to a collection agency, and specialist staff dealing with your case³⁶. The Debt and Mental Health Evidence Form, produced by the Money Advice Liaison Group, is recognised by creditors as evidence of your situation³⁶.

There is also a statutory scheme. If you are receiving mental health crisis treatment and struggling with your debts, a mental health crisis breathing space can give you extra protection from your creditors²⁹. A debt advice provider must initiate a mental health crisis moratorium on behalf of a debtor if it considers the debtor meets the eligibility criteria, the conditions are met, and the debts are qualifying debts³⁷. The application can be submitted by the debtor, the debtor's carer, an approved mental health professional, a care co-ordinator, a mental health nurse, a social worker, an independent mental health advocate and several other specified people, and it must include enough information to identify the debtor and evidence from an approved mental health professional that the debtor is receiving mental health crisis treatment³⁸. The debt advice provider must assess whether the debts are qualifying debts and obtain information relevant to the debtor's financial standing from at least one credit reference agency³⁷.

The Mental Health and Money Advice service supports people living with a mental illness or whose money problems are affecting their mental health, and can help with welfare benefits you might be able to claim⁴⁰. In one ombudsman case about an unaffordable payday loan taken out five years earlier, the borrower was put in touch with both debt and mental health charities to help improve his situation⁴².

The Lending Code and FCA rules that protect borrowers

The Lending Code has been in place for over 30 years and set good practice standards for lending to consumers and micro-enterprises across registered financial services providers, covering loans, credit cards and current account overdrafts⁶. It was the successor to the Banking Code and Business Banking Code, which committed lenders to look at your position sympathetically and positively⁴³. Full members of the Finance and Leasing Association were required to comply with the Code⁶.

The Code is now being retired. Throughout 2025 the FLA undertook a comprehensive review of the Lending Code, consulting FLA members, the FCA, consumer groups and other stakeholders, and the FLA Board agreed the retirement of the Lending Code with effect from 31 December 2026⁶. The FLA does not believe this will lead to any dilution of consumer protection, because of the overlap with FCA regulation: many of the rules and guidance in the FCA's sourcebook CONC align with the provisions outlined in the Lending Code⁶. After retirement, the FLA will not be able to comment or advise on individual complaints or disputes, or to reply about the outcome of its consideration of reported breaches⁶.

That leaves FCA rules and the ombudsman as the protections that matter. The FCA has been strengthening creditworthiness and affordability rules to prevent harmful subprime lending to those in, or at significant risk of, financial difficulty, and reviewing persistent credit card debt rules to provide subprime borrowers in financial difficulty with a safe way out of persistent debt⁴⁵. You can check a lender yourself on the FCA's firm checker: search the firm by name, select "Borrowing money, including credit card lending and credit information", and check the firm is "Authorised" with permission to "Lend you money on an unsecured basis"¹⁸. Complaints the lender cannot resolve go to the Financial Ombudsman Service, which decides whether lending was unaffordable and whether the lender treated you fairly²³. In one case study, a couple complained that a secured loan was unaffordable, and the regulations required lenders to consider sufficient information to make a reasonable assessment on whether the loan would have an adverse impact on a customer's financial situation⁴⁶.