Multiple credit card requests can damage credit score

October 18, 2006

Over 2 million UK consumers have damaged their credit rating by applying for multiple credit cards after being at first refused, a new report from moneysupermarket shows.

The report by moneysupermarket.com, the online financial comparison site, reveals that 10 million Britons have been refused a credit card in their time, and of those refused the first time, nearly three out of four have applied again with 27 per cent refused again.

The real problem in continually re-applying for any type of credit lies in a consumers credit score. Every application for a credit card is recorded in a persons credit score in addition to any refusals for credit. Credit card companies and banks check the applicants credit score or rating to see if they have had any refusals in the past. This information is then analysed and the credit card company decides whether to offer a credit card and at which APR. The typical APR of a credit card that is advertised is not always offered to an applicant. In many circumstances the APR could be much more depending on the persons credit score.

By applying for multiple credit cards, consumers may not only be refused credit but any credit that is offered could cost more than normal.

Robert Kenley, head of credit cards at moneysupermarket.com, said, "Our research shows Brits face a bit of a gauntlet when dealing with the credit card market"

"When consumers are finally accepted for credit cards they are often only granted a higher standard rate than they initially set out to get"

"This can be be for a variety of reasons, but is often due to lenders offering their headline rates to lowest risk customers and higher rates to those considered higher risk."

Consumers can check their credit score at any time by contacting Equifax (08705 143700) and Experian (0870 241 6212)