Campaign for change in the credit industry!

jimbob_too

Hi ManAtHome,

Yes, I have applied for, and received, copies of my credit ratings from these agencies, and can see nothing amiss.

It is all a bit of a puzzle - the fact that 3 Mobile have decided that I'm not good for a £15 a month phone contract is just the last straw... I have a perfect financial record and so 3 have lost themselves a reliable customer. But I don't know whether I should try my luck with other mobile companies and credit cards or take the less attractive option of waiting for 12 months and applying again (which seems to be the consensus opinion)

I just think it is an unfortunate aspect of the current system that it is clear I am in the 'bad books' of the Experian computer system but, having exhausted practically all the educated guesswork, am none the wiser as to what is going on.

I am happy to admit that I am suspicious as to whether their procedures for deciding credit are as clinical and effective as everyone seems to think... I have plenty of anecdotal evidence for people I know who are struggling under too many credit cards that they should probably not have been granted.

YorkshireBoy

Milky_Mocha wrote:

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

How obvious are CIFAS markers when shown on a credit report?

I believe that if the reason is due to fraud or credit history then the customer should be told.

The problem here is that the lender will not know, certainly from the Hunter system, that the application *is* fraudulent (see the links above). They may only suspect 'soft fraud' based on, for example, salary with regard to age. It's easier for them (or rather their automated scoring systems) to decline the application than to commit underwriting labour to manually assess the application.

With regard to credit history, when they say "get a copy of your file" I think they're expecting the applicant himself to find the reason, ie not on electoral roll, name/address/dob inconsistencies, number of accounts open, available credit etc.

In my experience, the only specific reason in writing I've ever received for a rejection is "over-indebtedness".

jimbob_too

Hi all,

Thanks for the interesting thoughts in response to my original rant. Regarding my own situation I have one or two leads to follow up, which I can now do over the next few days. It will be particularly interesting to see if I am able to talk to one of the claims underwriters.

More generally, I do appreciate that it is a complex industry BUT there must be some way to reform system that lets all of these companies hide behind a computer system. I have a demanding job and I don't like having to spend so much of my supposed leisure time writing letters, making phone calls and chasing people up.

Another point is that I think that many people in the industry probably assume that these automated systems such as the Hunter are infallible. I worry if there are appropriate safeguards in place to stop these machines from messing up people's lives without proper human supervision!

Anyway I'm tired out for the moment, so thanks and good night!

ManAtHome

The only reason for waiting to re-apply would be if you have a lot of searches recorded - a few years since I've been involved with credit agencies, but some providers used to take 3 months, other 6 months into account.

Scoring tended to be on a negative/zero/positive basis - for instance, you'd get a positive score for 2 credit cards/loans, a zero for 1 or 3, a negative for anything else. Major components (disregarding CCJs/bankruptcy) were length of time at your address, length of time with your bank, landline phone number, (lack of) payment history and defaults on cc/loans (again zero loans not necessarily good).

I can understand why they don't tell you why - as already mentioned, next application may be slanted away from the "bad stuff", but does sound like it would be useful in your case. Most disturbing is your bank's refusal - if the don't know you, who the hell does? I'd be inclined to move my account.

YorkshireBoy

ManAtHome wrote:

Most disturbing is your bank's refusal - if the don't know you, who the hell does?

Abbey's credit card is outsourced entirely to MBNA. Since MBNA are underwriting the card, they'll have 100% control over who is accepted.

I'd be inclined to move my account.

Likely to make matters worse, especially if OP has been with them more than a couple of years.

ManAtHome

Blimey, that's even worse - from my own experience and that of friends, MBNA are one of the most avaricious - continually sending cheques, increasing limits, offering upgrades to silver/gold/platinum etc.

Quite a few banks have in-house cards - and most are quite keen to get current accounts signed up. Although it can damage your external rating, many banks don't bother with reference agencies if they run their own cards.

JayScottGreenspan

I kind of agree with Jim Bob.

I recently ended up in a bit of a loophole:
Experian had made a mistake and I got refused credit as a result. When I requested compensation they said that I needed a letter from the bank saying that it was indeed their mistake which led to the refusal, and not some other factor. (The fact that this was obvious from my otherwise perfect credit history was of no interest to them).
Of course, the bank were sticking to their 'complex process' story.

Under the Data Protection Act, Experian were obliged to compensate me for the costs incurred following their error. But the bank were not willing to disclose the facts necessary for me to prove that their error was the cause of those costs.

We need a test case where a customer forces a bank to disclose the totality of personal data, which will surely include the banks credit score on them, and all the logic and calulation behind it.

If I get refused credit in the future I'm gonna go after the bank with the Data Protection Act.
DPA 1998 Section 7.1.d (abridged)
"where the processing by automatic means of personal data ... for the purpose of evaluating matters relating to him such as ... his creditworthiness ... has constituted ... the sole basis for any decision significantly affecting him ... [an individual is entitled] to be informed by the data controller of the logic involved in that decision-taking."

This is quitre clear - they aren't allowed to fob us off with stuff like "it's a complex process". They must inform us of the logic, and (IMO) hence the exact details of their calculation.

Almost_In_The_Black

Apart from commercial confidentiality (which is a big factor) there's also fraud prevention. Imagine the situation, I'm a Fraudster trying to get credit in someone else's name; everytime I try I might get rejected but I'll get told exactly why.

This then allows me to very easily build up a picture of how a certain bank makes it's decisions, once I know this then I am in a much better position to work out how to get around them. Clearly making life easy for the fraudsters is not what the banks want to do.

Bagpuss1973

Hiya

Jimbob - are you connected to anyone who does have bad credit? You should check.

I personally am signed up with checkmyfile.com who put together a really nice and easy to read credit file which included all three credit reporting agencies which I paid £19.90 which might seem alot but I think well worth it as it is easy to understand, although you can get all three agencies for free if you sign up to trial versions on experian and equifax websites (must remember to cancel before end of free trial)

You can get the third one from call credit from annualcreditreport.co.uk which is free.

It shows anyone who you have financial connections to eg an ex partner. Also, if you have too many recent searches it makes you look a bit desperate for credit which will put alarm bells going for the companies concerned.

Hope all gets sorted

Bagpussx

bert&ernie

JayScottGreenspan wrote: »

I kind of agree with Jim Bob.

I recently ended up in a bit of a loophole:
Experian had made a mistake and I got refused credit as a result. When I requested compensation they said that I needed a letter from the bank saying that it was indeed their mistake which led to the refusal, and not some other factor. (The fact that this was obvious from my otherwise perfect credit history was of no interest to them).
Of course, the bank were sticking to their 'complex process' story.

Under the Data Protection Act, Experian were obliged to compensate me for the costs incurred following their error. But the bank were not willing to disclose the facts necessary for me to prove that their error was the cause of those costs.

We need a test case where a customer forces a bank to disclose the totality of personal data, which will surely include the banks credit score on them, and all the logic and calulation behind it.

If I get refused credit in the future I'm gonna go after the bank with the Data Protection Act.
DPA 1998 Section 7.1.d (abridged)
"where the processing by automatic means of personal data ... for the purpose of evaluating matters relating to him such as ... his creditworthiness ... has constituted ... the sole basis for any decision significantly affecting him ... [an individual is entitled] to be informed by the data controller of the logic involved in that decision-taking."

This is quitre clear - they aren't allowed to fob us off with stuff like "it's a complex process". They must inform us of the logic, and (IMO) hence the exact details of their calculation.

I'm afraid that your interpretation of the act is at odds with the advice offered by the Information Commissioner:

"If a lender uses credit scoring and you are refused credit, you can ask the lender to explain the main reason why. For example there may be information on your credit reference file that the lender thinks is negative. Or perhaps you did not reach the lender’s pass-mark. Lenders may also try to make sure they do not offer credit to people who may not be able to afford it. So even if you repay your existing credit accounts on time, a lender may not want to overburden you with more. You should be aware that lenders do not have to give you details of how their credit scoring works."

Source:http://www.ico.gov.uk/upload/documents/library/data_protection/practical_application/credit_explained_leaflet_2005.pdf