Missing info warning for personal loans applicants
08 February 2010 09:39:32
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| Lenders' automated systems do not contain full credit history. |
According to the Times, there are currently between 40m and 50m active financial accounts that were established before 2000 but are not registered on credit files.
Lenders now tend to rely on automated systems to approve new loans, meaning the possibility of a rejection is greatly enhanced if there is no record of previous credit transactions.
The problem stems from the fact that the Data Protection Act forbids banks and building societies from sharing customers' details without their express permission.
"A missing account could have a significant impact on a lending decision," Vera Cottrell, a policy adviser at consumer group Which?, told the newspaper.
"We do not think anybody should be forced to agree to share data, but if you are applying for credit it makes sense that lenders see what other accounts you have open."
Last month, Jill Papworth wrote in the Guardian that Britons should not make multiple personal loan applications as each one will leave a mark on their credit records.
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