Credit Scoring is used when a new customer applies to first direct, taking into account information provided directly by you, any information we may hold about you, and any information we may obtain from other organisations. Where we use information from other organisations, which may include a licensed Credit Reference Agency (see Credit Reference Agencies). We will tell you who they are upon request.
The Credit Scoring system allocates points for each piece of relevant information and adds these up to produce a score. When your score reaches a certain level then we will generally agree to your application. If your score does not reach this level, we may not. Sometimes scores are calculated by a Credit Reference Agency and we may use these in our assessment.
The points allocated are based on thorough analysis of large numbers of repayment histories over many years of providing credit.
This statistical analysis enables us to identify characteristics that predict future performance. For example, individuals who have County Court Judgements registered in their name have proved to be less likely to meet payments than those without Judgements.
Credit Scoring produces consistent decisions and is designed to ensure all applicants are treated fairly.
Additionally, we have policy rules to determine whether we will lend. These reflect our commercial experience and requirements. For example, if we have direct evidence that you have shown poor management of credit products in the past we may decline your application.
Every application to open an account or borrow money involves a certain level of repayment risk for the lender, no matter how reliable or responsible an applicant is. Credit Scoring enables us to calculate the level of risk for each applicant based on the information we have obtained. If the level of acceptable risk to us is exceeded, we will not accept the application.
This does not mean that any declined applicant is a bad payer. It simply means that based on the information available to us, we are not prepared to take the risk of opening that account or granting that loan.
Lenders are not obliged to accept an application.
Lenders have different lending policies and scoring systems, and so applications to them may be assessed differently. This means that one lender may accept your application but another may not.
If your application is declined, this will not be disclosed to the Credit Reference Agency.
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