Four in five UK consumer credit applications declined due to lack of data

Industry News | 02/11/20

UK lenders declined up to 1.8 million consumer credit applications worth £10.6 billion last year due to a lack of information about the consumer, rather than poor credit histories or genuine affordability concerns, according to a study by the credit reference agency, Aire.

Aire analysed the experiences and credit histories of more than 2,000 UK consumers, concluding that up to 80 per cent of consumer credit applications rejected by lenders in 2019 could have been accepted without increasing lenders’ appetite for risk or burdening consumers with more debt than they could afford to take on at that stage.

The analysis showed that, in 2019, lenders rejected 2% of mainstream consumer credit applications immediately and declined a further 7% following referrals to manual underwriters. Among the rejections were 721,000 applications from borrowers with spotless credit histories and 258,000 from people with disposable incomes exceeding £1,000 per month.

Source: Finextra