North suffers more credit card rejections

Harrogate town centre
Harrogate town centre
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HARROGATE is among the most creditworthy places in the UK, according to new research on consumer credit, but the data also reveals a stark North-South divide.

The credit index, released this week by credit comparison website TotallyMoney.com, ranks more than 729,900 credit card applications based on the likelihood of acceptance and rejection.

Dumfries was the place with the highest proportion of credit card rejections, with 64 per cent of those who applied for a credit card being turned down in the last year.

The top ten places that have the lowest chances of securing credit cards are dominated by areas outside the South of England, the data suggested.

Dumfries was followed by Sunderland, Kilmarnock, Wolverhampton and Telford in terms of the places with the highest proportion of credit card rejections.

Meanwhile, the areas with the highest rates of credit card approvals tend to be in the South, the research suggests.

The top three areas in this table are outside of central London in St Albans in Hertfordshire, Bromley in Kent and Kingston upon Thames in Surrey, with around 44 per cent of credit card applications in these areas approved in the last year.

These areas also hold the top three spots for successful applications for credit repair products, with just under half of all applications likely to be approved.

Harrogate is the only Northern area in the ‘best of’ rank, measured by credit card approval rates, at number four, with 42.9 per cent of applications approved in the last year.

Leeds was ranked forty seventh in the UK for credit card approvals with an acceptance rate of 39.7 per cent.

Will Becker, chief executive and co-founder of TotallyMoney.com, said: “Our credit index has unveiled a wealth of insight and previously unseen data about rejection rates across the country.

“There are swathes of people struggling with their finances, particularly those in the North and Scotland.

“One of the key findings in this study is that credit card rejections actually increased last year which is interesting given the vast majority of lenders have actually relaxed their acceptance criteria over the same period.

“This can only mean that consumer confidence has started to increase and those with a poor credit history are making applications for credit again.

“Overall, whatever your postcode, it’s surprising to think that you have less than a 50 per cent chance of being accepted. Amongst consumers there is a poor understanding about how many applicants actually get the credit card they apply for and the damage caused by multiple applications.

“So our advice is very clear: always make sure you use a service that shows how likely you are to be accepted before you apply for credit.

“It’s simply not the case that if you’re rejected by one card issuer you’ll be rejected by all.”

In the last 12 months, 61 per cent of all credit card applications across the UK have been declined, according to the research. TotallyMoney.com said that the figure showed signs of “post-recession misplaced confidence” and was up from 59 per cent the previous year.

Across traditional ‘prime credit cards’, 64 per cent of applicants were turned down in the past year. This level of rejection has increased by three per cent year on year, indicating a decline in the quality of applicants, the researchers said.