Campaign for change in the credit industry!

jimbob_too

Hi, I am a first time poster on these forums, but have found this internet site a useful source of advice for several months.

I have decided to make this post because I have become increasingly irritated by my recent inability to be able to obtain credit of any sort. I have researched possible explanations for this - I have never been in arrears with loan repayments, I am on the electoral roll, I manage my bank account responsibly, I have no bankruptcy or CCJ, I earn a regular salary which comfortably exceeds my monthly outgoings etc. etc.

Other than a Debenhams store card (now expired), I have never held a credit card. Obviously this is a factor. However, the common advice appears to be to apply for a credit card at a 'shocker' interest rate (e.g. Vanquis or whatever). They have turned me down. I have also tried to apply for a credit card with my bank, Abbey National (their credit card is managed externally by MBNA) and with the Co-op, who provided my career development loan (back then I could obtain credit!). I have been turned down by both organisations. The final straw is that I have today been deemed unsuitable for the 3 Telecom '£15 a month' contract deal. Being denied this phone contract is a major inconvenience for me, as I will now have to continue having to pay the exorbitant 'Pay as You Go' rates. I am not happy! :mad:

My issue is that none of the credit companies are willing to provide DETAILED INFORMATION for their logic. All I usally receive is a letter explaining that I have been allocated an insufficient credit score based on information provided by Equifax/Experian. The letter also includes the right to an appeal. I usually take up this right (providing my bank statements as supporting evidence) and am again rebuffed. I have reviewed my credit statements from Equifax/Experian and have found nothing amiss in these statements.

As you can understand, I am baffled, and really cannot understand why the onus is on me to write further numerous letters and make further 0870 phone calls to discern the mysterious reason why I am now being denied credit. I think that credit companies should be legally obliged to write a DETAILED LETTER spelling out the MAJOR DETERMINANT in their credit decision. The letter should spell out exactly why my credit is being denied (i.e. they think my earnings are insufficient, I have made too many applications in a certain period, my movements are being monitored by some secret anti-fraud squad, whatever). At least then there would be much needed transparancy in the system - as it stands the 'mysterious credit score' is all that counts for an explanation. And, ridiculously, this is all the information that the credit providing companies are required to provide.

Such an approach would at least save me the effort of making so many fruitless applications and having to play the ridiculous, drawn out, guessing game of trying to work out what is wrong with my application and/or my lifestyle and circumstances. Of course the credit companies could continue to refuse my credit - that is their right. But I think that this transparent approach would put an end to the 'credit computer says no' culture that has developed in recent times, and probably encourage a more intelligent approach to customer service on the part of the credit providing companies. It may well be their right to deny me credit, but surely it is my right, having expended a great deal of effort in the application to be given a meaningful explanation, without having to resort to speculation!

OK, thanks for reading my little rant! So, who is with me in campaigning for this reasonable change?? :rolleyes:

tom188

Whilst I understand it is frustrating for you, I dont think that banks would be willing to provide this information because it is commercially confidential.

Are you on the electoral role and how frequently have you made the applications? If you are not or have made too many this will much reduce your ability to obtain credit.

Phoenix79_2

jimbob_too wrote:

I think that credit companies should be legally obliged to write a DETAILED LETTER spelling out the MAJOR DETERMINANT in their credit decision. The letter should spell out exactly why my credit is being denied

HSBC (as an example) probably have hundreds, maybe thousands of people applying for credit EVERY DAY. Do you really think its feasible to expect a detailed letter to be written in every single case when they reject someone?! Not going to happen.

I understand your frustration but your suggestion will simply not happen.

jimbob_too

Hi Tom, yes I am on the electoral roll. Yes, I have made a large number of applications recently - obviously there is a vicious circle at play here since if I am refused credit from one source I will naturally apply somewhere else. Most people would do the same thing

My point is that I don't see why the onus should always be on us, the consumers, to suss out exactly why we are being denied credit. If the credit companies were all legally obliged to provide a proper explanation (rather than the standard vague waffle about credit scores) then less time would be wasted both by me in making pointless applications and by them in refusing them.

I take your point about commercial confidentiality. However, surely if all banks were obliged to provide a proper explanation then they would all have to make the same disclosures. So none would lose out, or be any commercially worse off.

jimbob_too

Hi Phoenix79,

I think that if my idea was introduced then the number of credit applications received by HSBC (or whoever) would decrease over time.

I think if people were given a full and proper explanation as to why they were turned down for credit they would be able to go away and address whichever section of their life/financial affairs needed sorting out, instead of making further pointless applications elsewhere.

As it stands I am completely baffled as to why I keep getting turned down - sure I can make educated guesses or post here to see what other people think but I still don't know for sure if my best course of action would be to wait 6 months and try again, search for a better paid job, move to a different address, try another credit company, pull out all the stops and pay off my existing loans early or what?

All this uncertainty would end for me (and I expect many other people) with a simple explanation from the credit company. I don't think that it is too much to ask.

YorkshireBoy

Your early rejections may have been caused by lenders having an exceptionally high 'scoring' requirement; or other single factors such as salary, length of employment, time at address etc may be the reasons.

Subsequent searches may then fail due to the earlier searches being present on your credit file.

3 things to consider...

1. Have you continuous address/electoral roll verification showing with the CRA's over the last 3/6 years.

2. Have you been tempted to 'elaborate' certain aspects, eg your salary, of your application details following early rejections? If so, the reason now may be that these inaccuracies have been spotted by one of the fraud prevention systems the lenders use (Hunter being one such Experian tool).

3. Rather than writing appeal letters, it would be a good idea to try to have a chat with the manual underwriters. Co-op manual underwriters (from experience) are very helpful, so if your rejection here was recent, why not give them a ring?

jimbob_too

Hi YorkshireBoy,

Thanks for the suggestions. I haven't tried contacting the manual underwriters by phone, and will try this - a bit of detective work will find out what their number is. If they are able to expand on the issue then I will be very grateful to them. I just wish they could have done this in their letter (if not the original letter then at least in response to my appeal).

My biggest issue I have is that it is ridiculous that I should have to go to these lengths when the credit provider could very easily clarify directly the nature of the problem themselves!

jimbob_too

Another point - I'm interested in what you say about the 'Hunter' system used by Experian.

Surely if they turn down your application because they think you lied on an earlier application they would have to tell you this???

Clearly if I had lied or exaggerated my salary in later applications (following earlier rejections) then that it fraud and I could expect a stern letter of rebuke from the company concerned (and possibly a court summons?? I don't know...)

They couldn't instead simply turn down the application in the normal way, blaming a credit score, surely?? (I assume that nothing from the 'Hunter' system shows up on the credit score...)

If they think that I have been dishonest in an earlier application then I deserve the right to justify myself and set the record straight. This is exactly why they should be more explicit about their reasons for rejection. I am just fed up playing the guessing game with the Experian computer!

ManAtHome

Have you asked for a copy of your file from Experian (and Equifax) - think it's a couple of quid each and may give some clues.

Although not having a credit card isn't "good" (having lots of cards isn't either), reasonable time in employment, address, bank account etc are normally enough.

Milky_Mocha

ManAtHome wrote:

Have you asked for a copy of your file from Experian (and Equifax) - think it's a couple of quid each and may give some clues.

Although not having a credit card isn't "good" (having lots of cards isn't either), reasonable time in employment, address, bank account etc are normally enough.

The original poster states that he has seen his credit file and does not see anything amiss.

OP, perhaps you missed something on the credit file? Take a look at the searches at the bottom as well as the credit history details at the top. I do agree that applicants should be given a reason for rejection. However one customer services rep told me that in some circumstances if reasons are given then applicants would simply lie on the form to avoid being rejected. Answers to q's on applications would be simply geared towards satisfying lending criteria rather then being simply the truth. I believe that if the reason is due to fraud or credit history then the customer should be told.

YorkshireBoy

jimbob_too wrote:

Another point - I'm interested in what you say about the 'Hunter' system used by Experian.

My understanding is that the Hunter system is used by the credit providers themselves, not Experian.

It was developed by MCL, an Experian company. You may find the following of interest...

Types of Fraud

Detecting Fraud

Hunter - an introduction

The Hunter Solution