Campaign to Force Companies to disclose reason for refusing credit

pusscat

I actually don't understand HOW you could get a credit card company to provide you with the reason....it is rarely a single reason, if it is you would generally know about it (Bankrupcy, CCJ or whatever)

The bottom line is that a "scoring" system is based on weightings, risk and averages, so for instance

1 Missed payment - minus 10 points
Homeonwer - plus 25 points
holds platinum card with competitior - plus 20 points
Income £30k - plus 10 points
Debts - £15k - minus 10 points
Postcode is poor credit risk - minus 10 points
Occupation high risk - minus 10 points
Over 30 - plus 5 points
Credit score fair - 0 points

I

QOTD

Thanks Pusscat the above is useful, however I was recently refused a loan by the bank that I have been with for over 15 years (yes I know it's time for a change....) and then I started to get really worried as to why I had been refused the loan.

They did end the call by stating that I will receive a letter telling me why I had been refused because they couldn't tell me on the phone - I think that the woman didn't actually has this information, it was truely a case of "computer says NO!"

I did worry about it until the letter came through and fortunately the reason it cited was that they didn't think I would be able to afford the loan - however, had I been given the opportunity to give my defence on the phone I would have been able to say that the loan was to pay off my existing loan and credit card - both with said bank - and that the monthly payments on the loan would amount to £100 less that what I was currently paying on the existing loan and minimum credit card fee!!!

I appreciate that the person on the end of the phone is not always privey to the credit information; they must just see a YES or NO but I think it can be more distressing to not know the reason for refusal.

I did at least like the way my bank dealt with it, in that they couldn't tell me on the phone, but they could send a letter stating that it was nothing to do with my credit rating it was just their thoughts on my ability to pay it back...

smitchy73

QOTD,

I tried that once as well and it would have saved more than £100 a month, but when you think about it, if the bank gives the new loan to you, they're loosing out on that extra £100 per month or whatever it is, so it's in their interest to knock you back.

The PPi being entirley optional is another scam too, I've started finding paperwork to reclaim these from various companies, including the bank, we didn't even know it was there, albeit, we did sign the form, but it wasn't highlighted it was there or the fact it was optional, and yes I do think they knock you back for loan applications on the basis of you taking the PPi or not, thats my opinion anyway.

azjh77

And of course sometimes you are refused because you are TOO GOOD a payer. If a credit card company is not going to make any money from you (ie:- you pay the full amount every month) They may decide to lend thier money to someone else.

EdInvestor

azjh77 wrote: »

And of course sometimes you are refused because you are TOO GOOD a payer. If a credit card company is not going to make any money from you (ie:- you pay the full amount every month) They may decide to lend thier money to someone else.

Quite so.I'm sure this is a major reason they turn people down. As anyone who has plenty of assets and no debts will have noticed, no notice is taken whatsoever of an individual's overall solvency:the ideal customer is te spender who has had lots of debt especially on CCs and store cards with their very high APRs, but adequate income to service it and a very lackadaisical or ignorant attitude to money.

Prudence most definitely not required.:D

Another reason they might turn people down might be that they have met their lending targets that month already, so anyone who arrives late in the pipeline just gets turned down automatically.In these 'credit crunch" days when there is a big shortage of money to lend this is almost certainly a big factor.

IME being offered or turned down for credit is no indication whatsoever of an individual's actual financial position.

BettingMajesty

The thing that annoys me though...
...fair enough if they want to decline me credit, they are not inclined to do it neither should i feel embarrased abotu it. Your loss suckers.

But the fact that in being declined credit damages your further likelyhood with other lenders for credit. Fair enough if you don't want my business, but why should it limit my chances with other lenders.

edindie

BettingMajesty wrote: »

But the fact that in being declined credit damages your further likelyhood with other lenders for credit. Fair enough if you don't want my business, but why should it limit my chances with other lenders.

As far as I know, the number of times you’ve been refused credit is not on your credit file. The only possible derogatory data that this could bring is another search; but they’re becoming much less powerful nowerdays.

I build scorecards for a living and I have never come across that variable. But as I’ve only done it for a couple of years there’s a possibility that I might be wrong.

moneylessbella

I have resigned myself to the fact that a good credit rating is impossible to achieve therefore please give me a chance to sue all these credit rating companies that hold false information on me and still expect me to pay for the right to see my own information and then expect me to spend my time and effort correcting their lies. I think a standard settlement fee of £5000 for every time a credit rating company gets it wrong may improve the situation.