Applying for a new credit card? Check your credit score first

By UK CreditCards.com

According to the Credit Confidential Credit Index, consumers are finding it harder to get a new credit card, loan, store card or mortgage than they were 12 months ago. And with failed applications leaving a so-called 'footprint' on an individual's credit record, the importance of checking your credit history before submitting an application for a new credit card has never been so apparent.

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Britons face tight lending criteria
Many Britons are finding it hard to make ends meet, with high inflation and unemployment and the government's austerity measures all taking their toll. As a result, some consumers have attempted to get credit in recent months to help pay their bills, but a significant proportion have had their hopes dashed.

According to credit checking service Credit Confidential, it is now 10% more difficult for consumers to get a credit card, loan, mortgage or store card than it was 12 months ago. The company's new Credit Index shows that 56% of people have observed a decrease in their ability to get credit, rising to about 70% of people with lower to middle incomes.

One-fifth of respondents said they had cut back on essential spending in order to raise the necessary funds, while 22% had borrowed from someone else. Furthermore, 56% of people questioned by Credit Confidential said they expected their ability to access credit to shrink further over the next 12 months.

"Getting access to affordable credit has never been more important for consumers," says Paul Lewis, a spokesman for Credit Confidential. "But we know people are feeling the squeeze as banks are lending more rarely, or at higher rates."

Failed applications can scupper future chances
Credit card applicants should be aware that each time they apply for a card or loan, they leave a 'footprint' on their credit report. This can reduce their chances of securing credit over the next few months. However, says Mr Lewis, "people don't have to wait until they are refused credit by a bank to take control of their situation. By being aware of their own credit rating consumers can ensure they position themselves to get the best deals around."

Anyone who is considering applying for a credit card is advised to first access their credit report by contacting one of the main credit reference agencies. Once a person knows the state of their credit report, they will have a better idea of the type of lenders that will be most likely to approve their application. Some companies only consider applicants with a very good credit record, while others offer bad credit credit cards. Individuals with a poor credit record will therefore increase their chances of success by restricting their search to credit cards for bad credit and thereby reducing their chances of rejection. 

See related: How to get your credit report, score; Study: Credit card delinquencies widespread in the UK

Published: 19 April 2011