Have I been refused credit because of my family?

Dear James,

I have tried to get credit (a contract mobile phone) but I was refused even though I just had my 18th birthday and I have no debt or credit history. They said items may be linked to the address; and I know my mother and sister both have debts. How can I solve this?

James, London

Dear James,

Credit checks no longer take place simply on addresses, or even families. People are treated as individuals and can only be linked when there is evidence of joint financial activity, such as a joint application for credit. As a result, I think it’s highly unlikely that information about your mum or your sister has caused your recent credit refusal. What is much more likely is that because of your tender age you do have no credit history. The credit scoring systems most credit providers use to help make lending decisions all work slightly differently. But it’s safe to say that someone with very little credit history is likely to be seen as a bit of an unknown quantity by most lenders because there’s not very much to go on. As a result, the phone provider probably gave you a low credit score, resulting in their decision to turn you away. Getting a copy of your credit report will show you what information we hold on your credit report, which, along with the information you provide on your credit application form, is used to build your score. If you really want a contract phone, try writing to the company’s head office to ask them to reconsider. Explain your age and, if you can, provide evidence that you are responsible with money by enclosing copies of bank or building society statements. You should also review your credit report carefully to see if you can make improvements. One thing you should definitely check is whether your name is shown on the electoral roll. Not being registered can put a dent in your score, so if you aren’t registered for some reason visit www.yourvotematters.co.uk.  If your registration is processed before 20 April you’ll also be able to vote in the general election on May 6. Aside from the electoral roll, if your credit report shows that we don’t hold much information about you, don’t worry. Assuming you already have a bank account, any overdraft facility you agree with your bank in the future should appear on your credit report and will help boost your credit status. You might also consider asking your bank for a credit card with a low credit limit. If you’ve banked with them for a while they will be more prepared to give you credit than a new lender. By simply using the card for small purchases now and then and repaying the full balance at the end of the month, you will collect positive information on your credit report which will certainly be a great help to you in the future. (November 2012)


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