Borrowing and credit scoring
What you need to know
Like other responsible lenders, to help us make decisions on when to give you credit, we use a system called credit scoring when we assess your application. This is designed to give you straightforward answers and clear explanations.
Why do we use credit scoring?
Credit scoring is a method we, and many other lenders, use to predict how likely we are to get back the money we lend. It’s a consistent, accurate and fair way of assessing risk.
To work out your credit score, we look at:
- information you give us when you apply
- credit reference information e.g. whether you have kept your payments on your credit accounts up to date or whether you have been or are in arrears
- your history with us
How does credit scoring work?
We give you points for each bit of relevant information, then add them up to get to your credit score.
Once you’ve scored a certain number of points (and met our other policy requirements), we’ll usually approve your application. The score you need to get your application approved may vary. To help make sure our systems remain secure and fair, we keep the finer details of how we work out your score confidential. Our branch and call centre staff will not be able to provide the full details of your score either. But it is important that you complete your application in full, because if you leave something out it may affect our assessment.
We use credit scoring when we look at applications that use credit. We’ll tell you when you apply for one of these if you’re going to be credit scored.
Credit Reference Agencies
The main Credit Reference Agency in Ireland is the Irish Credit Bureau (ICB). The ICB maintain records on an individual to assist lenders to assess credit applications.
What information is provided from a Credit Reference Agency?
Credit Reference Agencies keep records about people’s credit history to help financial organisations assess credit applications.
- These records may include:
- registered court judgments
- register of electors
- bankruptcies and insolvencies
- credit agreements in arrears
- previous credit searches by other organisations
How is a Credit Score calculated?
The credit scoring system allocates points for each piece of relevant information and these are added up to produce a score. Provided your score reaches a certain level, your application for credit will generally be agreed. In order to protect the integrity of the scoring systems, the way your credit score is calculated must always remain confidential.
Can you get your own credit report?
To get a copy of your credit report from a Credit Reference Agency, you must complete an application form. Please contact ICB for an application form to be posted to you or you can download the form from www.icb.ie. This form should be completed, signed and returned to ICB along with a fee of €6.00 which can be a postal order or bank draft.
As ICB have a responsibility under Data Protection Legislation to keep your records secure, they cannot discuss any aspect of your credit report with you over the phone until after you have received your credit report and can quote the unique reference number from the report. Processing time takes approximately 3-4 working days excluding postage to and from ICB and starts from the time ICB receives your completed application form. Once you receive your credit report you may contact ICB to discuss it further if you wish.
What if the information the credit reference agency has is wrong?
If you feel the details in your credit report are inaccurate you may request to have the information corrected.
You must start by contacting the Lender and request that they make the necessary changes to your record. If the information is accurate, the Lender is not obliged to change it. ICB can only make changes to your credit record upon written instruction from the Lender.
The address of the ICB is:
Irish Credit Bureau
If your application is refused, you will be given a brief explanation of why you were refused. You may also have the right of access to your personal records held on our files. This can be obtained by written request to your branch and on payment of a fee.
In general your application can be declined for two reasons:
- A scoring decision, where your overall score was not sufficient to reach our acceptance pass mark
- Specific lending policies e.g. as a responsible lender it is not our policy to offer credit to applicants who might find it difficult to meet the repayments
A few simple ways to try to improve your score
Make all your regular payments on time
Always try to make at least the minimum payments on any credit products you have, on time. Missing or making late payments can often be registered on your credit report and this may harm your chances of getting credit in the future.
An easy way to help you avoid late payments is to set up a Direct Debit. If you’re in difficulties, you should speak to your lender who will be able to help you.
Close any accounts you no longer use
Having a large amount of credit that you do not use can affect your credit score. For example, if you have a credit card with a limit of €5,000 but you never use the card. Keeping accounts open that you don’t use can also make you more vulnerable to fraud. Also if you have old accounts, such as mobile phone or credit cards, they might be registered at a previous address that can affect your ID checks.
Manage your applications carefully
Making lots of credit searches in a short space of time can affect your score, so it may help to space out any credit applications, and those for things like car insurance and mobile phones. Moving house can also disrupt your score, so try to make important applications before you move. Finally, check if the product you’re interested in offers a quotation facility so you can check any terms before applying, and, without your credit search being recorded.
If you have other credit accounts with us, why might we refuse your application?
Your personal circumstances often change over time. So when we make our assessment we look at any current information that is available to us. This information may mean it is inappropriate for us to offer you additional credit at this time.
Would an application ever be turned down because of where you live?
No. We won’t decline your application because of where you live, unless for example you live abroad and the product is only available to Republic of Ireland residents.
Can you appeal against a decision?
Yes. But we can’t guarantee the outcome will be any different. Giving us any information we didn’t take into account originally should help. You’ll find details about our appeals procedure at your local branch. If you decide to make an appeal, you should give us any relevant information you feel supports your request, for instance, if you have additional regular income or investments that you didn’t include on your application.
If your application is turned down, can you reapply?
If your circumstances change we’ll be happy to look at a new application from you. If your circumstances haven’t changed since your last application, it’s unlikely our decision will change. But we won’t turn down an application just because we’ve turned one down in the past.
Applying or reapplying for credit with us or another lender will also have an impact on your credit rating. Remember that lots of credit searches in a short space of time can affect your score, so it may help to space out any credit applications.
If we turn you down, will other lenders automatically do the same?
No. Every lender’s scoring system is different. But the credit reference agency will keep the search we did about you on file, and if another lender uses the same agency, they will tell them about it.
Applying for credit with another lender will also have an impact on your credit rating. Remember that lots of credit searches in a short space of time can affect your score, so it may help to space out any credit applications.
Who makes the decision on whether to provide credit?
We make lending decisions based on the information provided by the ICB, your history with us and the information you provide when you apply. The ICB do not decide who should get credit.