As a headteacher who has returned to work in the UK after 10 years away my family and myself are prohibited from any form of loan to help establish ourselves as we have a poor credit score.
My bank manager is amazed that continually we are refused the loan we need for a car, for work, and basic furniture. The bank would be happy to loan the money as we have two years of good banking history, permanent job, excellent salary, a tiny overdraft and more than adequate affordability for repayments. He cannot believe that people with large debts, poor job prospects and a past history of problems, are given credit and we cant get anything. Its out of his hands as it has to go to head office and then its based on credit score only.
It is disgusting that none of this counts for anything – we need debt to be able to increase our credit score. Have you ever heard anything so daft in your life! If you are serious about putting the nations finances in order start with individuals.
Scrap the credit reference agencies or, if they really are necessary, make them use affordability criteria based on proven income and verified outgoings.
Why does this idea matter?
A vast majority of this country has access to facilities which enable them to get into increasing levels of debt. A system which allows debt based on a persons current level of debt is ludicrous and is allowing the wrong people to access credit where people like myself are barred.
In those banks that are part owned by the tax payer, give the local bank manager the power to make such decisions based on their local knowledge of the applicant. Make this the same for all banks if possible.
This way credit would be directed to those who can afford it and the level of personal debt across the country would be reduced with people living within their means.