Please can I have a bigger overdraft
The credit squeeze has started to hit even leafy Cambridge. Last week the son, who had received frequent communications from what we used to know as “The Listening Bank” suggesting that he might like to extend his overdraft, decided to take them up on their offer.
So he trotted off to the local branch and had an interview with some bank official not much older than himself, reviewing his assets etc. The upshot was that he was not a good enough credit risk. In other words, despite the come-on advertising campaign, the answer was no.
In some ways, this was an entirely sensible decision. The son has no assets at all apart from a few guitars and his Mum and Dad, so without some investigation into us, I don’t see why he should get a bigger overdraft.
On the other hand, he came home clutching his refusal letter explaining that he had not been given more credit for two reasons. One: he hadn’t passed the bank’s own guidelines. Two: he had “failed”, as it were, a credit reference agency check. The letter helpfully suggested that he might like to see what the credit reference agencies were saying about him and gave the names of three.
Having heard stories of terrible errors creeping into these records, we decided to take a look.
The first one on the list was called Experian and it offered a free glimpse of your credit reference. But on the principle of there being no such thing as a free credit search, we went on to the next one. This was called Equifax and was selling you your details for a one-off fee of £14.95.
The result turned out to be fine. He had a “good” score. The only warning light on the report was against the “electoral roll” section. He had only been on the electoral roll at his current address for two years, which was not as long as some lenders liked. True, but he is only 20 – so he couldn’t actually have been on roll any longer, even though he has lived at his current address for the last 11 years. Maybe it might have been simpler just to take points off for being young.
But the other revealing section was the one about “how often has your credit rating been checked by a lender in the last 6 months”. The answer was: "never". So despite what they’d said in his letter, the bank hadn’t actually used a credit reference agency at all. It was just a convenient alibi for not giving him the cash.
In the end, though, his story has a happy ending (or an imprudent one, if you have a stricter attitude to credit). He went back to Oxford and into a bank branch there. They increased his overdraft in a flash.