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Shoppers hit by credit crunch
(12-11-07) - High-street shoppers are now feeling the effect of the credit crisis as increasing numbers of people struggle to be approved for store cards, mobile phones and catalogues.
Homeowners and people applying for purely financial credit through credit cards and loans have already felt the consequences of the troubled money markets. Barclaycard announced in September that it was rejecting 50 per cent of card applicants and had cut the credit limit of 500,000 customers.
However, speaking to the Independent, Neil Munroe, spokesman for credit reference agency Equifax, said that smaller lenders and those not offering purely financial credit had also become weary. “People will prioritise their payments, starting with their mortgage, while mobile phones, catalogues and store cards come lower down the pecking order,” increasing the chance of people defaulting on these repayments, he said.
Chris Eagle, CreditChoices.co.uk commercial manager, said: “Small scale lenders such as mobile phone companies and catalogues - who only risk relatively small amounts per customer - are now taking a far greater interest in people’s credit scores.
“Consumers need to re-budget to ensure they don’t miss any repayments as even the slightest blemish on their credit report could set off alarms for lenders, preventing them from getting previously easily accessible forms of credit.
“There are things that consumers can do to improve their credit rating, such as cancelling old, unused credit and store cards and ensuring that they’re on the electoral role. Anyone concerned about their chances of being approved should check their score with a credit reference agency (see useful links) and take steps to improve it,” he advised.
