Britain’s Credit Blackout report from guarantor lender Buddy Loans has found that more than three million people have been frozen out of credit in the past year, despite mainstream lenders promising to increase access.

The report found almost one in five (17%) were refused credit due to having no previous history of borrowing, while women were disproportionately impacted with nearly a quarter of men being accepted (23%) versus just 16% of women. 

The report found the most popular reasons for being refused credit were:

•    I have a poor credit history – 40%
•    I have no previous record of having credit – 17%
•    Too many searches of my credit history in the past six months – 15%
•    My credit history is linked to an ex-partner who has a poor credit history – 10%
•    I don’t know why I was turned down – 9%

Buddy Loans also found that ‘Generation X’ – 35- to 44-year-olds – was the age group being hit hardest by the credit blackout, with more than a quarter (26%) of those who’ve applied for credit being turned down.

The report hopes to highlight the sweeping generalisations being made by mainstream lenders, as many people find themselves unable to borrow following unexpected life events, such as redundancy, relationship breakdowns or unexpected pregnancy.

Guy Mackenzie, director of Buddy Loans, felt that having a poor credit history was not an automatic indicator that you can’t afford to borrow money and was disheartened that so many were being refused point blank.

“…Often when they are most in need of a leg-up to get their finances back on track.

“While the industry has a responsibility to ensure people don’t take on debt that they can’t afford, it’s also important that those who can afford credit are able to make home improvements, buy a car or consolidate their existing lending. 

“The research also shows the importance of understanding, and checking, your credit score, as it can have a big impact on your ability to borrow and the rates at which you can borrow.”