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Tighter checks on Borrowers
Even those borrowers with spotless credit records could see their choice of mortgages and credit cards slashed. Egg have withdrawn cards from 161,000 customers it thought was high risk, even if they had neevr missed a payment.
Lenders are now looking at additional factors such as missing a payment on another card or bill or increasing levels of debt elsewhere. So now lenders are also looking at the ability of the borrower to service the debt and the affordability of credit alongside credit history reports - taking into account the borrowers complete profile.
Peter Brooker from the credit checking agency Experian says: "Just because they have unblemished credit records does not mean they are viewed as a good risk by lenders. Someone might have five credit cards and be esrvicing them perfectly well, but if they are approaching the credit limit on several of them then their risk profile could still be quite high."
Card providers are beginning to cut credit limits if they think borrowers are getting over stretched or if they miss a payment.
Tags: loan, borrowing, bad credit
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