Credit reports on the rise as consumers are refused loans

17 April 2008 / by Rachael Stiles
The rising number of people being refused credit on loans, credit cards and mortgages is having a knock-on effect on the number of consumers applying for a copy of their credit report.

The UK's biggest credit scoring firm, Experian, has found that in order to see where they have gone wrong on the road to a good credit score, twice as many consumers are now applying for an Experian credit report compared with six months ago, and are learning the importance of keeping their credit history clean.

James Jones from Experian said that an increasing number of consumers are taking a "proactive" approach to their creditworthiness.

Mr Jones told that "Up to 20 per cent of people now check their credit report before applying for credit", and that "the vast majority use the internet to do so in order to get immediate access to their score, and also to receive alerts if their credit status changes."

The rise in consumer demand for credit reports will offer some relief to Experian, which has suffered a 20 per cent decline in the revenue generated from mortgage checks by US and UK companies; this is because of the drop in number of successful home loan applicants as lenders are tightening their criteria and reducing the amount that people can borrow.

Experian managed to produce a promising performance in the latter half of 2007, which was helped largely in the US by the strength of Hitwise, its web-monitoring branch. Its shares, having lost 40 per cent of their value since the credit crisis began last summer, have gone back up by 39.25p to 395.25.

Experts still warn that Experian could be facing a very uncertain future as credit markets show little sign of improving, but the Bank of England is hoping to loosen the squeeze on liquidity by transferring mortgages into Government-backed bonds.

Meanwhile, has found that Brits are largely ignoring the credit crisis in favour of keeping up with the Jonses; according to research, they are continuing to acquire more debt andspend beyond their means.

Jim Hodgkins, Managing Director of explains that "using credit to fund a lifestyle you can't really afford can lead to huge financial problems" which can mean "you'll soon make yourself less financially attractive to lenders and find that you can't get access to the best possible credit deals.

"With lenders reacting to the credit crunch by tightening their lending criteria, you can help stay on top of your borrowing and how well you're managing your finances by regularly monitoring your credit report."

© Fair Investment Company Ltd