Refused Credit

Borrowers have no absolute right to credit and lenders are not bound to offer credit to anyone who asks for it. However, there are some rules: A borrower cannot legally be refused credit on grounds of race, gender, religion, sexual orientation or address.

Lenders can legitimately refuse an application without giving any reason. However, most will give some idea of why the application has failed. The applicant is entitled to know whether the refusal is the result of credit scoring or information provided by a Credit Reference Agency.

If an applicant has recently been divorced, moved house or simply not applied for credit previously, he or she is likely to be turned down simply because of the imperfections in the credit reference system. Many people are turned down for no reason other than they do not appear on the electoral register. Just because one institution has refused credit does not mean all others will. Some lenders will only lend to individuals who have been employed for more than six months so even those with a perfect credit record may find themselves being turned down if they have recently changed jobs.

Some credit repair companies also claim to be able to remove adverse credit account information. This is simply not true. Information may only be amended on a file by a Credit Reference Agency under the direct instruction of the lender who provided the adverse information.