Receiving a credit refusal can be frustrating, but it does not mean the process is over.
A refusal is simply a sign that something in your profile or documentation does not meet the bank’s criteria — and in many cases, this can be corrected.
In this article, we explain the most common reasons for credit refusals and what you can do to regain real chances of approval.
1. Why do banks refuse credit applications?
Financial institutions assess several factors before approving or rejecting a credit request.
The most common reasons include:
1.1 Taxa de esforço demasiado elevada
If the percentage of your income committed to monthly repayments exceeds 35% to 40%, the bank may consider you a higher-risk borrower.
1.2 Negative records with the Bank of Portugal
Late payments, defaults, or outdated information in the Credit Responsibilities Map may lead to immediate rejection.
1.3 Insufficient or unstable income
Temporary contracts, irregular income, or income that is too low can negatively affect the assessment.
1.4 Negative banking history
Frequent overdrafts, failed direct debits, or inconsistent account movements are considered warning signs.
1.5 Profile does not fit the bank’s policy
Each bank has its own criteria. You may be rejected by one institution and approved by another, provided you meet its approval requirements.
2. O que fazer logo após a recusa?
2.1 Ask the bank for a clear explanation
Segundo a legislação, o banco deve explicar os motivos da recusa.
Isto é essencial para saber o que corrigir.
2.2 Check your Credit Responsibilities Map
Log in to the Bank of Portugal website and check:
- Active credits
- Outstanding balances
- Payment delays
- Possible errors
- Issues that have already been resolved but not updated
If you find incorrect information, request a correction from the responsible bank.
2.3 Improve your banking behaviour
Avoid:
- Overdrafts
- Late payments
- Very low account balances
- Inconsistent transactions
Simple improvements can significantly change the bank’s assessment.
3. How to improve your profile before applying again
3.1 Reduce your debt-to-income ratio
You can do this by:
- Credit consolidation
- Paying off small debts
- Reducing or cancelling credit cards
- Increasing your declared income
3.2 Organise your documentation
Having updated tax returns (IRS), payslips, and bank statements is essential to convey trust and financial stability.
3.3 Apply with a co-borrower
Two incomes may make it possible to obtain credit that would not be approved individually.
3.4 Increase the down payment (in the case of mortgage credit)
The lower the risk for the bank, the higher the probability of approval.
4. One bank refused… another may approve
A refusal does not mean it is impossible to obtain credit.
Each bank has:
- Its own criteria
- Different debt-to-income limits
- Distinct internal policies
- Specific products for certain profiles
It is very common for a person to be refused by one bank and approved by another under good conditions.
5. How a credit intermediary helps after a refusal
An experienced credit intermediary analyses your case and identifies the best strategy to increase your chances of approval.
What does this mean in practice?
- Explains the refusal clearly
- Checks your Credit Responsibilities Map
- Identifies the most suitable bank for your profile
- Calculates your real debt-to-income ratio
- Suggests immediate improvements
- Submits applications only to banks that are genuinely likely to approve
This support helps avoid multiple refusals, which can damage your credit history.
Being refused by a bank does not mean the end of the road.
With small adjustments, professional analysis, and the right bank, it is entirely possible to turn a refusal into a future approval.
The key is to understand the reason for the refusal, improve your financial profile, and choose the right institution to submit your application.
Has your credit been refused and want to know how to resolve it? Contact us — we will analyse your case free of charge and help increase your chances of approval.
