Millions putting their credit records at risk, warns MoneyExpert.com
Credit card companies have turned down applications from more than 3.24 million people in the past six months as they continue to turn the screws on risky lending, new research* from MoneyExpert.com reveals.
The independent financial comparison website’s research estimates that as many as 18,000** applications are being rejected by card companies every day providing yet more evidence that the UK’s credit binge is turning into a starvation diet.
With such a high number of applications currently being rejected MoneyExpert.com is warning all potential applicants to consider the strength of their credit rating before calling a card company. MoneyExpert.com says increasing levels of bad debt hitting banks as well as the current credit crunch has prompted many firms to tighten rules on new applications.
The figures show around one in 14 people – 7 per cent of adults – have been card rejects during the past six months. MoneyExpert.com says more people have been rejected for credit cards than for any other financial product.
Sean Gardner of MoneyExpert.com, said: "For years borrowers have had the upper hand in the credit card game but the rules have now changed. People with debts who thought they could keep shuffling their cards to stay ahead are now running into trouble."
"Card applicants need to be confident that they are going to be accepted in the current lending environment as a rejection could lead to black marks on credit reports."
"A credit rejection could have knock on effects for borrowers when it comes to taking out all kinds financial products including a mortgage. "
"Given the turmoil in the mortgage markets the options are running out for people with problem debts. They need to take control of their borrowing and crucially to reduce their debts."
Young adults are most likely to have a credit card application refused – the research showed that 10 per cent of people aged between 25 and 34 were turned down in the last six months, more than any other age group.
Those approaching retirement are by contrast considered the lowest risk by credit card companies, with only three per cent of people aged between 55 and 64 having been rejected in the same period.
* YouGov interviewed 2,000+ GB adults online between 31st March and 2nd April 2008.
** 180 days in 6 months divided by total number of rejections, 3.24 million