By Daniel Hunter
New research from Which? reveals credit card companies are adding insult to injury by keeping consumers in the dark about why applications are rejected.
Which? has found worrying levels of dissatisfaction with the way that credit card rejections are currently handled, with lenders failing to give constructive advice when they turn people down.
Nearly half (48%) of those who were turned down for a credit card in the past two years were dissatisfied with the lack of advice and information about the refusal. The most common reasons for feeling dissatisfied were poor communication (31%) and a lack of evidence about why the application was rejected (29%).
Eight in 10 (79%) say they weren't given specific reasons for the rejection, with three in 10 (30%) telling us they were not given any reason at all, and half (49%) just told to check their credit file.
Barclaycard had the highest percentage of people who were told more than 'check your credit file', but this was still less than a quarter (23%), and MBNA had the lowest percentage at 9%.
Lenders must tell you if you're rejected based on information from a credit reference agency, and provide details of the agency, although they do not have to give any more information.
"Credit card providers are letting people down by failing to give them constructive advice after a rejection. We want lenders to give a useful reason for a refusal and practical tips so borrowers can take steps to improve their chances of being accepted in the future," Which? executive director, Richard Lloyd, said.
"We also believe people should be able to shop around for credit without being penalised. We'd like all companies to use quotation searches so people can see whether they may be accepted without a full application footprint being left on their credit file. People should be put back in control of their credit."
One of the best ways to make sure your application has the best chance of being accepted is to check that the card you're applying for is right for you. A handful of comparison sites and lenders offer a quotation, allowing lenders to generate a quote based on a borrower's circumstances and show the likelihood of them being accepted. This also has the benefit of allowing you to shop around for credit without it showing on your credit file.
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