One in four consumers searching to borrow had their applications rejected by credit card
companies in the past year.
That adds up to an astonishing 4.5 million people who failed to get a credit card or loan.
Far from helping borrowers, banks and finance companies are accused of simply cherry
picking the best candidates by offering them headline rates to entice them from rivals rather
than making more borrowing available.
Credit profile company Experian, which holds files on most consumers in the UK, is warning
that applying for multiple loans only to receive regular knock-backs is damaging their
chances of borrowing in the foreseeable future.
Every time a finance company checks a credit profile, the details stay on record for up to two
years.
Although the file does not contain information about whether borrowing was granted, other
lenders can see that consumers are shopping around and mark down their credit scores.
West Midlands has the lowest refusal rate
Paying a firm for credit repair services to improve a credit profile is generally a waste of
money, but consumers can take some steps to look like more appealing customers for lenders.
These include a few simple measures like:
•
Making sure your name is shown on the electoral roll at your main home
•
Pay bills on time
•
Sign up for a phone – it doesn’t matter if this is a landline or a mobile
Many consumers find applying for credit confusing because they do not understand how
banks and credit card companies rate their ability to repay their debts.
Young people aged between 18 and 34 were turned down most often, with 36% of credit card
and loan applications failing. The figure drops to 12% for the over-55s.
Men 28% were rejected more than women 23% and applicants in London (38%) were turned
down more than consumers living anywhere else. Those living in the West Midlands had the
lowest refusal rate – just 15%.
The figures were sourced by moneysupermarket.com.
