New research from Compare the Market suggests that fear of being turned down for credit is preventing millions of people from applying for financial products altogether, as new Buy Now Pay Later (BNPL) affordability checks are introduced across the UK. From 15 July 2026, BNPL providers will be required to carry out affordability and creditworthiness checks before approving credit, bringing the sector under Financial Conduct Authority (FCA) regulation for the first time. While the changes are designed to encourage responsible lending and provide stronger consumer protections, Compare the Market's research suggests many shoppers are already anxious about the possibility of being declined. Fear of rejection is stopping people from applying The research found that just 31% of UK adults feel confident applying for traditional credit products, while 14% actively avoid applying because they fear being rejected. This anxiety may become more noticeable as affordability checks become a routine part of the Buy Now Pay Later checkout process. When asked how they would respond if they were declined for BNPL: 19% said they would pay using their existing cash savings or debit card 14% would abandon the purchase altogether 6% said they would consider using higher-cost forms of credit The findings suggest that while some people have alternative ways to pay, others may delay purchases or even turn to more expensive borrowing. Understanding affordability checks Affordability checks are intended to help lenders assess whether borrowing is suitable for each individual, reducing the risk of people taking on debt they may struggle to repay. Many checks are expected to involve soft credit searches, which allow lenders to assess information without leaving the kind of footprint associated with a full credit application. Abigail Foster, personal finance expert at Compare the Market, says: "Many of us have experienced that sinking feeling of worrying about a credit application being rejected. It's understandable that this concern is putting some people off applying altogether, but it's important not to let fear of rejection stop you from exploring your options. "The new Buy Now, Pay Later affordability checks are there to help make sure people aren't taking on borrowing they may struggle to repay. While it can feel like an extra hurdle at checkout, the aim is to protect consumers and encourage more responsible lending. "It's also worth remembering that these checks will often involve a soft credit search. Unlike a hard search, a soft search typically won't affect your credit score and isn't visible to other lenders, so it shouldn't be a cause for concern if you're asked to go through one. "If you are declined for Buy Now, Pay Later, try not to see it as a setback. It can be an opportunity to pause and reassess whether the purchase is affordable right now. Avoid rushing into more expensive forms of borrowing, as these can create bigger financial challenges in the long run. "If you're unsure why you were declined, checking your credit report, reviewing your budget and speaking to the lender can help you better understand your options. Taking a little extra time before borrowing can make a real difference to your long-term financial wellbeing. Comparing different financial products and understanding how lenders assess affordability can also help you make more informed borrowing decisions. ” Sajni Shah, Compare the Market’s Personal Finance expert, adds: “Buy Now, Pay Later has become an increasingly popular way for people to spread the cost of purchases, but many shoppers may not realise that the rules are changing. As these new regulations come into effect, it's important that consumers understand both the protections available to them and what to expect when using BNPL products. "The changes are designed to bring greater transparency and stronger safeguards for borrowers, including clearer information about how products work and additional routes for support if something goes wrong. "Whether you're considering Buy Now, Pay Later or any other form of credit, taking the time to understand the terms, compare your options and ensure repayments fit comfortably within your budget can help you make more confident financial decisions.” NoYesLending14 Jul, 2026