UK rejections reach record high
Statistics indicate that just over one in ten people who apply for a credit facility have been rejected as creditors continue to increase the already strict requirements a consumer needs to meet on their credit file in order to obtain a card.
The difficulty to acquire credit has been furthered by the fact that rejected applications leave a negative mark on your credit file which then makes it even harder to obtain credit in the future.
Further information has revealed that over 20% of rejected applicants almost immediately try and apply to a different credit card provider which further blemishes their credit file. Multiple applications have always been a deterrent to creditors and the statistics paint a picture about the vicious cycle that is causing so many rejections to occur.
“These are frustrating times for credit card customers as they are bombarded with some of the best balance transfer deals in history but they simply cannot get them,” pointed out Will Becker of Totally Money.
“Consumers must be made aware that many of these deals are only available to those with a squeaky clean credit record.”
On the surface, this seems like a rare example of responsibility on behalf of banks and loan providers. The lending of money to people who could not afford it was a key factor in today’s economic struggle, and the tightening of criteria is a necessary act to ensure that large levels of debt do not amount again across the country.
However, the problem seems to be that credit card providers are creating attractive new offers that consist of low rate and long-term interest free packages, but is only providing them to people with spotless credit records. This allows them to obtain the ‘best’ customers for them and means that anyone who does not adhere to their idea of this is left with multiple rejections and a poorer credit score.
There are many different methods you can employ in order to improve your credit file. The first is ensuring that every payment you are required to make is made on time or early. This displays to creditors that you are a reliable debtor and can be trusted to make your repayments on time.
It is also beneficial to place yourself on the electoral register, as creditors take this into account when considering your application.
Credit Card debt increases
Alarming data has come to light this week that indicates that a number of people who have had their applications accepted have been unable to utilise their money carefully. Statistics have illustrated that over £8.4 billion was borrowed by consumers via their credit cards in August alone, whilst further information has displayed that debt levels continue to increase the country.
The worry is that with the cost of living increasing that more and more people are becoming dependent on credit to provide them with daily essentials such as food, transport and housing. If this continues to happen then something will have to be done in order to make the cost of living more affordable for the layman.