Guide to credit scoring

Useful information about
credit decisions



What you need to know about the credit decision process for credit cards, loans
and overdrafts

Understanding our credit decisions

Why might your application for credit be turned down?

There are a few reasons why sometimes we might not be able to lend you money: 

 

Insufficient income

The credit that you’re applying for may be unaffordable due to your income or outgoings.

 

Past repayment problems

You may have been made bankrupt in the past, missed payments or have a County Court Judgement against you.

 

Missing information

We may not have received the correct level of information about your income or outgoings when we assessed your application.

 

Too much borrowing 

You may have too much borrowing with us or other banks and building societies.

 

Low credit score

You may not have reached the minimum credit score needed.

 

If I don't agree with the outcome of my application, can I appeal against the decision ?

You can appeal against a decision, but we might not be able to change the outcome of your application. 

 

If your circumstances have changed, or you think there is additional information we haven’t taken into account, then you can use our Appeals Process. Full details of our appeals process can be obtained at your local branch.

 

You must make the appeal within 30 days of our credit decision, and you should give us any relevant information that you feel supports your request. For example, you may have additional regular income or investments that you didn’t include in your application.

 

Please note, if your circumstances haven’t changed since your last application, it’s unlikely our decision will change.

Will other lenders give me the same decision?

Every lender has a different scoring system, so that’s difficult to predict.

 

The credit reference agency will keep the search we did about you on file, and if another lender uses the same agency then they will tell them about our search too.

 

Applying for credit with another lender will also have an impact on your credit rating. Remember that lots of credit searches in a short space of time can affect your score, so it may help to space out any credit applications.

Credit scoring explained

How does credit scoring work? 

To help us make decisions and assess your application for credit, we use a system called credit scoring. It's designed to predict how likely we are to get back the money we lend. It’s a consistent, accurate and fair way of assessing risk.

 

To work out your credit score, we look at:

 

Information you give us when you apply

Information from credit reference agencies

Your account history with us

 

We give you points for each bit of relevant information, and then add them up to get to your credit score. Once you’ve scored a certain number of points (and met our other policy requirements), we’ll usually approve your application. The score you need to get your application approved may vary.

 

To help make sure our systems remain secure and fair, we keep the finer details of how we work out your score confidential. Our branch and call centre staff will not be able to provide the full details of your score either. But it is important that you complete your application in full, because if you leave something out it may affect our assessment.

 

We’ll tell you when you apply if you’re going to be credit scored.

How do you get information about my credit score? 

The main credit reference agencies in the UK are Equifax, Callcredit and Experian. These agencies keep records to help lenders like us assess credit applications.

 

Their records include information such as:

 

Your electoral roll status;

If you’ve been made bankrupt or insolvent;

If you have any County Court Judgments and Court Decrees;

Any current and previous borrowing you have and the way you managed these accounts;

Any credit reference searches carried out by other companies;

The names of anyone you’ve made a joint application with or have a joint account with, or the names of people you’ve told the credit reference agencies you’re financially associated with.

 

This information goes into your credit report (also called your credit file). That’s where all your credit activities, such as any credit card accounts or loans you may have, the balances, and how regularly you make your payments, are listed. Your credit report also shows if any action has been taken against you because of unpaid bills.

How can I get my credit report?

It might be useful to see the details held about you by the credit reference agency once a year or before you make any new credit applications. You can request a copy of the information the credit reference agency holds on your file.

 

You’ll need to give them your title, surname and first name(s), your date of birth and full current address, including your postcode. If you've lived at your current address for less than six years, you’ll need to supply all your addresses and postcodes during this time.

 

If you ask for a copy of your credit report, it’ll include the names of anyone you’re financially associated with. So you’ll be able to see who they are, but no further information about them.

 

When you get your report, the credit reference agency will let you know what to do if you feel that any of the information it includes is incorrect.

 

Further details are all set out in a leaflet from The Information Commissioner's Office called ‘Credit Explained’.

How can I improve my credit score?

 

Make all your regular payments on time

Always try to make at least the minimum payments on any credit product you have, on time. Missing or making late payments (even to your mobile-phone operator) can often be registered on your credit report and this may harm your chances of getting credit in the future. An easy way to help you avoid late payments is to set up a Direct Debit.

 

Check you’re registered on the Electoral Roll at your current address

The Electoral Roll is used to confirm both your name and address, so if you’re not registered your application could be delayed or you might even be turned down. You can check with your local council to see whether you’re on the current Electoral Roll.

 

Close any accounts you no longer use

Having a large amount of credit that you do not use can affect your credit score. For example, if you have a credit card with a limit of £5,000 but you never use the card. Keeping accounts open that you don’t use can also make you more vulnerable to fraud. If you have old accounts, such as mobile phone or credit cards, they might be registered at a previous address that can affect your ID checks.

 

Check the information on your credit report is accurate and up to date

If you don’t agree with something on your report, let the credit reference agency know straight away. You can also ask to add a note to your credit report if past credit problems were due to special circumstances. This is called a ‘notice of correction’ and is a short statement of no more than 200 words that you can attach to your file.

 

Manage your applications carefully

Making lots of credit searches in a short space of time can affect your score, so it may help to space out any credit applications, and those for things like car insurance and mobile phones. Moving house can also disrupt your score, so try to make important applications before you move. Finally, check if the product you’re interested in offers eligibility check facility so you can check any terms before applying, and, without your credit search being recorded.

We're here to help

If you have any questions about credit scoring, please search in our Support Centre for FAQs and additional information.

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