Banks are shutting the door on more than 4.2m people in the UK who are looking for mortgages and credit.
However, many could be being unfairly judged as more than a third (34%) of people who’ve checked their credit score have found glaring errors on their report.
The research of over 2,000 individuals from Amigo Loans finds that over 4 million people have credit score of less than 720. This is judged as a ‘poor’ or ‘very poor’ by the banks and as a result, their computers will say no.
While most people strive to stay on top of their finances, very few are as diligent with nurturing their credit score – a key factor in securing a mortgage or loan. In fact, only one in eight people in the UK have ever checked their credit score.
Of those who have, 76% have a score of less than 720. This puts them in the ‘poor credit rating’ category and deems them ‘untrustworthy’ by the banks.
Industry figures* show that more than half of the UK general public – over 20 million people – are at risk of being declined credit, yet the vast majority (88%) have never checked their score and are completely oblivious to this pending sting in the tail.
This means there could be an additional 16 million unwitting borrowers who could be shunned by their local branch for a mortgage, credit card or loan.
Glen Crawford, CEO at Amigo Loans, which commissioned the study said:
“Whether you’re male or female, from Penzance or St Ives, there is a computer says no culture that runs rife within UK financial services. Once your credit record is tarnished, high street lenders will close the door on you, regardless of who you are, what you do for a living or how much you earn.
This is a pandemic credit gap. Over 20 million people in the UK could have a poor credit score. And what’s worse, the majority have no idea. The issue here, lies in education. I’ve heard countless people say that if you have a poor credit score you don’t deserve to borrow money. That’s a completely flawed argument. Some people have never borrowed before, some people have errors on their credit records, and some people have been out of the country serving with the forces. They could all be completely trustworthy but could be turned down because of a number on a computer screen. Judging someone on a credit score alone is like deciding to marry someone based on their dating profile picture – it’s not enough information.”
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