Until now, banks and other financial institutions have usually refused to tell customers why they were rejected, even if the reason was potentially innocuous, such as failing to appear on an electoral register.
A bank and credit industry working party has recently submitted proposals to the Office of Fair Trading for a change in industry practice, which would ensure that people are given an indication of why they were refused. If the guidelines are approved by the OFT, lenders will probably start to implement them by the end of this year.
Barclays Bank has pre- empted the move. From July the bank will write to people who have been refused a card after failing the bank's credit- scoring system. Barclays will explain why they were rejected and will invite them to re-apply.
In a pilot scheme Barclays found that one of the most common reasons for failing was gaps in an applicant's banking history. This may have been because the individual's bank did not supply references.
The Co-operative Bank has already adopted a system similar to Barclays' following widespread complaints from credit- worthy individuals who were rejected for its Gold Card.Reuse content