Press room

Britain in Credit Crisis - 12 million Brits have been refused bank credit

Press Release - 27 August 2013

  • Banks are turning their backs on one in four (24%) Brits: 50% believe their bad credit score is to blame
  • A fifth (19%) of Brits are unaware of any alternative lending options available to them
  • But of those that are, pay day loans worryingly top the list for three quarters (72%) of Brits

The latest research from Amigo Loans 1 reveals Britain is at the height of a credit crisis, with a whopping 12 million Brits2 (24%) having been turned away by their banks for credit including bank loans, mortgages and credit cards, up from 7 million in 20103. Half (50%) of those that have been turned away believe this is a direct result of having a poor credit score4.

According to the UK’s largest guarantor loan company, a fifth of those who have struggled to access credit (17%) have had to ask a friend or family member to apply on their behalf. A further 19% believe they’re completely stuck if they are refused credit by their bank because they are not aware of any other alternative forms of lending available to them. But most worrying of all - of those that are aware of the alternatives, pay day loans hits the top spot for three quarters (72%) of Brits.

Brits’ awareness of alternative lending options available:

Alternative lending optionPercentage of Brits
Pay day loans72%
Credit loans49%
Guarantor loans37%
Peer to peer loans29%
Log book loans25%

The research highlights that a quarter (25%) of Brits are seriously worried about the state of their current credit score, and a further 13% are concerned it is so bad that it will hold them back from getting a loan or mortgage in the future. Some Brits are also confused about credit scoring itself, with a third (30%) admitting to not knowing the difference between a credit score and a credit check.

James Benamor, founder and CEO of Amigo Loans comments: “Banks are meant to be doing everything they can to offer credit to individuals and small businesses that need it, but the situation only seems to be getting worse rather than better. They’re letting consumers down by heavily basing their decision on an individual’s credit score – something which can be easily damaged by late credit card or missed bill payments. And this is only going to get worse as purse strings continued to be tightened and many Brits face a constant struggle to keep on top of their outgoings in the current economic climate.

“Yet the biggest concern of all is when it comes to alternatives. The majority of Brits are only aware of pay day lenders who offer loans at ridiculous rates, and these are likely to lead consumers into even more financial difficulty. If you need access to credit and are turned down by your bank, it’s vital to remember that there are other options out there and struggling Brits shouldn’t find themselves being forced down the payday route.”

Amigo Loans’ lending is based on trust, personal endorsement and one-to-one interviews offering loans using friends and family as guarantors. An Amigo loan actually gives borrowers the opportunity to build or rebuild their credit score, as opposed to destroying it through the use of payday loans. Interest is calculated daily, there are no charges or fees for early or late repayment, and it can work out thousands of pounds cheaper than regularly using payday lenders.

Return to Press Releases