Give me some credit

Whether you've been rejected for a ?100,000 mortgage or a ?1,000 credit card, being turned down for credit can be extremely frustrating.

Judging by the number of emails we receive from readers, being turned down by a lender is one of the most common, and annoying, of all consumer gripes. To help you determine what the problem might be, and put it straight where possible, we have put together a list of answers to the most frequently asked credit questions.

I have never defaulted on a loan payment, I have no county court judgments or anything on my credit report that could make me look like a credit liability. Why don't they want to lend me money?

Lenders take a whole lot of information into account when deciding on whether to give you credit. This includes all the information you give them in your application form, such as details about your job, salary, home and marital status. If you've been turned down, it might not be about you, it could be about their preferences.

"Sometimes lenders are looking for a particular type of customer and can refuse applications simply because you do not fit this profile," says James Jones, consumer relations manager at credit reference agency Experian.

It could be that the lender considers your salary isn't high enough, or your outgoings are too big for you to afford the amount you've asked to borrow, in which case they are really acting responsibly.

Lenders verify your credit file with a credit agency to check your name and address, how much you owe and how well you've managed any other previous credit commitments. The problem may be in there somewhere. There could be evidence of problems with previous debts.

Or, it could be as simple as not being on the electoral roll, which the credit agencies use to check your name and address. You can get on the register at aboutmyvote.co.uk.

It's important to find out what has gone wrong. As Neil Munroe, external affairs director at credit reference agency, Equifax, says: "People can be rejected for a number of reasons, and you have to determine what those reasons are." If, instead, you carry on applying in the hope that another provider will say yes, you may find you are storing up problems for the future.

Start by asking the lender - most sign up to a code of practice and will let you know the main reason for the rejection. They may just point you in the direction of your credit report, in which case you will have to investigate further.

How do I get a copy of my credit report?


You can contact one of the credit agencies, CallCredit, Equifax or Experian. A copy of your credit report costs ?2 and you can order your report online, by phone or by post.

You can also see a sample credit report on Experian's website.

If I've been turned down by one credit card company, does that mean no one else will offer me credit?


Not necessarily. Different lenders assess applications in different ways and some may lend to applicants that others refuse based on exactly the same information.

However, what is known as a "footprint" will be left on your credit report to show that you applied for credit - whether your application was refused or granted is not shown.

I had a couple of county court judgments (CCJs) against me a a while back. How long will these affect my credit records?


Mr Jones explains: "CCJs are kept on your report for six years but are marked as satisfied once you have repaid them and obtained a certificate of satisfaction from the county court."

Lenders don't like CCJs but you may find that they are more willing to offer credit once the judgments are "satisfied" and as they get older. After six years they can come off your report.

I have received a copy of my credit report. My brother's name has come up as we used to share a flat. He's had financial problems and can't get credit and now it seems I'm being treated the same way. Can I do anything about it?


At the moment, the details of other people you've lived with can crop up on your credit record. However, this is changing in November 2004. From then on, the only people that will show up on your credit report will be those who have a genuine financial link with you. For example, if you and a partner are both named on the mortgage or if you have a joint current account. "If you are not financially connected to your brother, simply let the credit reference agencies know and they will update their records," says Mr Jones.

I've been turned down for several credit cards. I've been in full-time employment for 12 years and earn a good salary so it can't be income related. I've never had a credit card or a loan and someone has suggested that this might be the reason. How do I build up a credit record?


Having no record of past debts could, in theory, be a drawback. Mr Jones explains: "Although lenders are probably more concerned with your current commitments and whether you have had bad debts in the past, many do like to see a track record of prompt repayment, which is why the credit reference agencies hold a lot of positive information."

So if you have little or no credit history, it means lenders can't check how you manage credit. If you've had a current account with the same bank for some time, you could try asking them for a credit card. You will already have a relationship with them, so it may prove easier. If the rate of interest on your bank's credit card is higher than you'd like to pay, then be disciplined and try to pay off the full amount each month to make use of any interest-free period.

The bank will then send positive information to the credit agencies, which will make it easier for you to get a better deal elsewhere.

I have been shopping around for a credit card. I've heard that this will leave black marks on my credit report. Is this true? How can I get all these searches removed?


"A large number of credit applications on your credit report, particularly over a short period of time, can have a detrimental effect on credit applications because it can be a sign of fraud or an indication that you are desperate enough for credit to risk becoming over-committed," says Mr Jones. Try not to make applications when shopping around until you have found the deal you want.

There is a difference between finding out how much a loan will cost, or asking for a quotation, and asking if you can have the money, or making an application.

If lenders do need to check your credit report to give you a quotation, they should be able to make a "quotation" search rather than an "application" search. Both leave "footprints" on your file, but future lenders won't be put off by quotations searches, while applications may be more of a concern.

I've just got a copy of my credit report. It says I've made a late payment to my credit card but this isn't true and the card company agrees with me. Can I do anything about it or do I have to live with it?


You certainly don't have to live with it. If it's not correct, then you can get it put right. Ask your credit card company to contact the credit reference agency to correct the mistake.

My marriage broke up, I had to find a new place to live and I got behind on the repayments on a personal loan and some credit cards. I'm now settled, my finances are back on track but I'm worried about the impact these have on my credit record. Shouldn't banks take into account my difficult circumstances?


Now you've got yourself back on track, check your credit report to make sure your past debts are shown as paid or up to date. You can also put a 200 word "notice" on your credit report to explain your difficulties to prospective lenders and the fact that you have sorted them out.

Banks are not obliged to give you credit based on that information, but they do have to take it into account when making their decision.

There's no way of taking accurate information, however negative, off your record. It will stay there for six years, but should have less of an effect on your ability to get credit as time goes by.