Consumer credit eligibility rallies as approval rates edge closer to ‘pre-lockdown’ levels

Credit card, loan and other borrowing options are expanding for UK customers according to new analysis from Experian. They found that lenders are returning to the market as the lockdown comes to a close.

This is good news for worried consumers as during the pandemic’s peak, around half of lenders had withdrawn lending products.

Experian’s barometer showed that at the start of the lockdown, just 25 percent of people searching for a loan found a product they were likely to be accepted for.

Additionally, 60 percent of those searching for a loan did not see any offers matching their credit needs.

Fortunately however, Experian revealed that 40 percent of consumers searching for a loan through their service will find a product they’re likely to be accepted for, of these people, 63 percent of them will be pre-approved.

Overall, the number of people who did not find any loan product that matched their needs dropped to 38 percent in July.

Amir Goshtai, the Managing Director of Experian Marketplace, commented on the company’s analysis: “Analysis from our latest Credit Barometer provides some welcome encouragement for people seeking loans.

“Eligibility ratings give people an indication of their chances of being approved for a specific credit deal. These ratings are now edging closer to pre-lockdown levels as lenders grow in confidence and start returning to the market, improving consumers’ chances of being approved for credit.

“At the moment, our panel of brands offering loans stands at 79 percent of what it was pre-lockdown, showing signs of improvement in the credit market.

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While Experian revealed that credit card products have returned to the market at a slower rate to loans, acceptance rates for credit cards are beginning to bounce back.

Over half (53 percent) of consumers are now likely to see at least one lender with a strong chance of lending to them, when searching for a card.

Amir went on to provide some words of comfort for weary consumers: “We understand this is a challenging time for many and not everyone will be in a position to attain credit.

“But people shouldn’t feel disheartened if they find their chances of being approved for credit are low.

“The market is changing daily and so is consumer eligibility.

“By building their credit score, consumers can put themselves in the best position to take advantage when lenders review their eligibility criteria.”

To help people further, Experian went on to provide tips on how to boost a credit score:

The first being something that many people may not realise impacts their rating:

Register to vote

“As well as enabling you to have your say at the ballot box, registering to vote unlocks several additional benefits.

“Firms can use the information to quickly and easily confirm your identity, but it can also almost instantly add points to your credit score, because electoral roll registration is seen as a sign of reliability and stability.”

The next tip concerns an unfortunate reality, that one of the easiest traps to fall into could have a disastrous impact:

Keep up to date with payments

“It’s important that you keep up to date with all your financial commitments as missed payments are bad news for your credit score.

“If you are struggling to meet payments because of the impact of the pandemic, it’s crucial you speak to your lender as soon as possible.

“Many lenders are being flexible and offering support – such as reduced payments, payment holidays and credit limit increases – to help their customers through this difficult time.”

They concluded by examining how basic admin could help with the situation:

Monitor your score

“Regularly reviewing your score and checking your eligibility rating before applying for credit products are good habits to adopt early on.

“Not only will monitoring your score regularly give you an indication of how lenders may view you, but it also allows you to check how your financial behaviours are impacting your score.”

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