Catch-22 sit­u­a­tion over credit card

The Daily Telegraph - Your Money - - READERS’ LETTERS -

I re­cently tried to take out a phone con­tract but was re­fused on the ba­sis of an un­sat­is­fac­tory credit check.

I could not un­der­stand this as I have con­sid­er­able as­sets and no debt. My credit cards are paid off each month by di­rect debit and we live in a large house with no mort­gage.

I checked my credit ref­er­ence file and every­thing was con­firmed as good. It has been sug­gested that I have been re­jected be­cause I have no credit his­tory as I have not taken out any credit in this coun­try since re­turn­ing from abroad 10 years ago.

Surely I am caught in a Catch-22 sit­u­a­tion, as I can­not get a credit his­tory? PG, CAMBS

Lack of a credit his­tory is a prob­lem that can af­fect peo­ple at both ends of the age spec­trum and those who have lived abroad.

Re­search by Ex­pe­rian, the credit ref­er­ence agency, found that there were nearly six mil­lion peo­ple in Bri­tain who were vir­tu­ally in­vis­i­ble to the fi­nan­cial sys­tem, be­cause there was in­suf­fi­cient in­for­ma­tion avail­able about their fi­nan­cial track record.

Hav­ing had a bank ac­count or credit card for a long time may mean in­for­ma­tion won’t be given to the credit ref­er­ence agen­cies. This is be­cause banks rou­tinely started to pass on in­for­ma­tion con­cern­ing, for ex­am­ple, over­drafts and mort­gages to credit ref­er­ence agen­cies only from around 2000.

Peo­ple whose ac­counts had been set up ear­lier had not been no­ti­fied that this would hap­pen and so their credit his­to­ries couldn’t be shared au­to­mat­i­cally. For this to change the cus­tomer had to ask the bank or build­ing so­ci­ety to re­lease the in­for­ma­tion. Even once that is done, de­tails about past trans­ac­tions can­not be passed on ret­ro­spec­tively.

No credit his­tory will mean would-be lenders – in­clud­ing mo­bile phone


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