Independent UK Credit Card Comparisons | Today is Friday, February 10th, 2012
 

"Credit card rejections result in increase in false information"

By admin | September 4th, 2008 | Featured

Since the global credit crunch made its way to the UK all financial industry sectors have been affected, and all have tightened up their lending criteria as a result of this. Like other types of lenders, many credit card firms are increasingly cautious over handing out credit, particularly to those that could be considered a higher than average risk in terms of falling behind with repayments and adding to the lender’s bad debt levels.

At the end of the first quarter of this year a report showed that credit card rejection levels had soared, with around three million credit card applications having been turned down in the previous six months, which is around the time when the global credit crunch started to wreak havoc in the UK’s money markets. Lenders began to tighten up on their lending criteria and started to reserve their best rates for those with decent creditor histories and ratings, reducing the chances of anyone with a less than perfect credit history of getting finance via a credit card.

The three million rejections over the six months period between last October and this March equated to around 15,555 rejections on credit card applications each day, according to industry officials. This affected many people, from those desperate to get credit in order to cope financially to those that wanted to keep switching cards on a regular basis in order to try and avoid paying interest on their borrowing – often known as rate tarts.

When the figures were released in March one industry official said: ‘Credit card companies have been badly burnt with bad debts and are putting the shutters up in response by turning down more and more applications. Anyone with debt problems who is hoping for an easy way out by taking out another credit card is liable to find that they’ll be turned down.’

He added: ‘It is entirely sensible for credit card companies to reject applications from people with debt problems or who look as if they have already borrowed enough. Rising interest rates mean it is harder to service debts and people should not be encouraged to get deeper in debt.’

However, this rise in credit card rejections also fuelled a different problem – the fact that many people have turned to lying and providing false information on their applications in order to increase their chances of getting a credit card. The fraud prevention service CIFAS recently described the level of applications on which lies and false information had been provided as worrying. Often people lie about things such as their credit history or debt levels in order to try and boost their chances of success, and some also lie about things such as their income, employment history, and even their address if there is any connection with bad credit.

Recent Additions:

Tags: rejected credit card application, Credit Cards

Related Articles:

  • Factors that can affect your ability to get credit

    These days, in the current financial climate, getting credit can be very difficult for many people, and there are a number of common factors that can play a big part in whether or not you are accepted for the credit that you apply for. We all need to rely on credit for something or another,...

  • Credit card customers don’t have confidence to look for better deal

    There are concerns that many credit card consumers in the UK may not have the confidence to shop around to find a better deal on their credit card, because they are nervous about the impact that this could have on their credit rating and subsequently on their financial futures. A recent report suggested that consumers...

  • Credit card companies getting tougher

    Credit card companies across the UK are continuing to get tough in a bid to try and minimise on the risk of increasing bad debt levels. Over the past couple of months a number of credit card providers have increased a range of fees, charges, and rates in order to compensation for lost revenue, bad...

  • Increase your chances of being accepted for a credit card

    As many people may already have realized getting credit isn’t always easy, and many people are turned down for finance such as credit cards every year. Whilst recent years have seen many people enjoy getting easy credit, the last six months or so have been very difficult due to the global credit crunch, which has...

  • Many credit card consumers will not shop around

    Although most people are aware that the interest rates, terms, and benefits of credit cards can vary from provider to provider and from card to card it has been revealed that many credit card customers are still afraid to shop around for the best deal. One of the main factors affecting their confidence when it...

Post A Comment:


Virgin Credit Card image

Other Recent Articles

Use of credit cards declines whilst payday loans increase

It seems that many consumers may have switching from spending on credit card that can sometimes come with high rates...

By Reno | February 10, 2012 | Read More

Useful Tips for Credit Card Holders

Modern technology offers comfort and convenience that is often helpful for people in a fast paced everyday living. With just...

By admin | February 7, 2012 | Read More

Credit card decision by Lloyds could have serious effect on charities

For many years now, a range of leading and well known charities have been able to boost the levels of...

By Reno | January 28, 2012 | Read More

Many have to rely on credit cards to make ends meet

There was a time when people had credit cards to enable them to pay for occasional larger, more expensive items...

By Reno | January 26, 2012 | Read More

Brits increasingly dissatisfied with credit card providers

According to recent reports, Brits are becoming increasingly dissatisfied with their credit card providers, particularly in the case of the...

By Reno | January 20, 2012 | Read More