Credit scoring

Every application for a credit has to be carefully considered. All relevant information is assessed and, like most major financial organisations, we do this with the help of a system known as credit scoring.

The following information aims to answer some of the questions and concerns you may have about credit scoring and our reasons for giving or not giving you credit.

We score some of the information that is provided by you when applying for an Intelligent Finance credit product. Other factors that may influence your score include how you manage your Intelligent Finance plan, and any information provided by a national credit reference agency.

We gather all of this information to build up a 'profile'. This may include details such as your age, employment history, loans you already have, how you've managed previous accounts and any other factors known to be good indicators of risk.

Credit scoring makes sure that each application for credit is assessed in the same way and allows credit to be given fairly and impartially. We check our systems frequently to make sure they are accurate and reasonable. Responsible lending is essential, both for the good of our customers and ourselves. The Financial Conduct Authority considers credit scoring to be an aid to responsible lending.

Intelligent Finance will not disclose details of score levels or provide information on the way we calculate the score. This is because this information could reduce the security of our system. People could, for example, use the information to make fraudulent applications. For this reason, the scoring details must always remain confidential.

If Intelligent Finance turns down an application, it simply means that, on a specific occasion and, after considering all the information available to us, either:

• the overall score was not high enough to reach our acceptable 'cut-off' score; or
• our policy means that we are unable to offer credit (for example, as a responsible lender it is not our policy to offer credit to applicants who may find it difficult to meet the repayments).
  

This does not imply that we think anyone is a bad payer, or that we have received detrimental information about someone's financial affairs. It means that experience indicates that applicants in similar circumstances are more likely to experience payment problems. Credit scoring doesn't usually identify any one item of information as the only reason for refusing an application, since many details are used to calculate the score. This explains why we cannot always be more specific with our reasons.

Intelligent Finance fully understands that being refused can often be upsetting, but we must reserve the right to decline certain applications.

The individual circumstances of our customers change over time. Our assessment takes into account any current information that's available to us. Based on the reasons described above, it may, therefore, be inappropriate to offer additional credit on this occasion.

Yes. Although we can't guarantee to reverse a decision, we're happy to reconsider an application if you're able to provide additional information to support your application. Please write to us saying why you feel the decision is wrong and supply any relevant information in support of your appeal. For example, copies of bank statements, a credit reference file obtained from Equifax or Experian or other information. (See section 'Can I see what information a credit reference agency hold about me?').

Clearly circumstances change over time and we're happy to consider any new applications. There's no time limit on when you can re-apply because we won't refuse an application just because we have declined a previous one. However, if your circumstances haven't changed since your last application, it's unlikely that our decision will change.

Not necessarily. All lenders have different lending policies and assessment rules. Each lender's credit scoring system will reflect these differences and another lender could accept you. Whilst we keep a record of our decision, it remains completely confidential and we won't make it available to other lenders. However, the credit reference agency may record the fact that we have looked at your file and this may be taken into account by lenders when assessing future applications made by you or anyone you are financially associated with.

A credit reference agency is an organisation that stores and puts together financial and publicly available information about almost every adult in the UK. A credit reference agency doesn't decide whether credit should be given - it simply provides factual information that helps us decide whether to accept an application.

The information provided by a credit reference agency falls into two categories - Public Information and Credit Account Information.

Public Information consists of information from the Electoral Register (provided by local authorities), which is used to help identification; county court judgments (from the Registry Trust Ltd, which is the official body that records county court judgments) and bankruptcies (from the official London and Scottish Gazettes).

Credit Account Information is held by credit reference agencies on behalf of lenders. Most of the UK's major credit-granting institutions store information about the credit agreements they have with their customers, with a credit reference agency. Many of these lenders have agreed to share this information with each other. When someone applies for credit, this lets them check whether or not that person has repaid money to other lenders in the past - in other words they can check a person's credit history.

Favourable information, such as evidence of a loan you've regularly paid on time, should support your application. Alternatively, information showing loans you've not been able to repay on time may adversely affect your application. Experience shows that people who have had past financial difficulties are more likely to have difficulties keeping up repayments in the future. Also, if you are already having financial difficulties, it may not be in your best interests to have more credit.

If you've been refused credit you can get advice from your local Trading Standards Department, Citizen's Advice Bureau or Consumer Advice Centre. The Information Commissioner also produces a useful leaflet entitled 'Credit Explained' You can obtain a free copy from the Information Commissioner's website or by phoning 0303 123 1113.

Most lenders recognise that the finances of people living in the same household are often linked. If one member of the household gets into financial difficulty, it may affect the finances of the other members. When assessing an application, we will take into account information about people with whom you are financially associated. This includes anyone with whom you share a joint account, or have made a joint credit application, whether successful or not.

Information about anyone who used to live at your address is not provided by a credit reference agency unless you have a financial connection with them.

Yes. If you wish to see what details, if any, a credit reference agency holds about you, you should write to them asking for a copy of your file. You will need to give them the details of all the addresses you've lived at over the last six years, and enclose a cheque or postal order for £2.00.

Intelligent Finance uses information from Equifax Europe (UK), or Experian for credit scoring. Their addresses are:

Equifax plc, PO Box 10036, Leicester, LE3 4FS You can also apply online for a copy of your Equifax file by visiting www.equifax.co.uk.

Experian, Consumer Help Group, PO BOX 8000, Nottingham, NG80 7WF. You can also apply for a copy of your Experian file by phoning their Consumer Help Service on 0844 481 8000.

If the details held about you are right, then Intelligent Finance and/or the credit reference agency can't change them. However, if any entry is wrong, the agency's help service will help you put it right. If you find that the credit reference agency gives you information on individuals with whom you have no financial connection, this can also be changed. Details of your rights under the Consumer Credit Act 1974 and the Data Protection Act 1998 will be sent to you when you apply for a copy of the information held by the credit reference agency.