Trying to unravel the mystery of why you were refused credit
The mystery of credit scoring has been foxing readers. MW from Bournemouth was turned down for a mobile phone contract with O2 having been with them for over 10 years. He said: "I never missed a payment. I checked my credit file with Equifax and the only thing amiss was that the bank had put through three credit searches on the same day when we remortgaged. This was subsequently corrected, but despite this O2 still said it is declining the application and can't tell me why because it's 'commercially sensitive'. Equifax advised me to check my wife's credit file, and this shows various stamps from when we used Compare the Market to find a car insurance policy – none of the quotes was taken up."
Meanwhile, LA from Cheltenham, Gloucestershire wrote: "I purchased a Nokia Lumia 900 through Buy Mobile Phones. It was a T-mobile pay-monthly deal. I received the phone but realised it was unsuitable and cancelled the contract. I then ordered an iPhone5 from another company, also with a pay-monthly T-mobile contract, but the order was cancelled due to a failed credit check. Apparently, it was because I had tried to buy another phone before the first one was officially cancelled. After receiving confirmation the first contract had been cancelled, T-Mobile said my credit rating looked fine. I tried to order a phone and it was cancelled for the same reason. T-mobile then claimed I would not be able to buy online, yet offered me the phone I wanted at a much higher price."
If you browse deals on comparison websites, your searches should be treated as "inquiry" or "soft" searches which cannot be seen by lenders. An application (hard) search will stay on a consumer's credit file for one year, so more than five such searches in six months can put off lenders. Equifax says your record is clean. Moreover, O2 performed an "opt out" search so it should not have considered your wife's details in its decision. Despite Equifax having given you a clean bill of health O2 insists there are still "commercially sensitive inconsistencies" on your file and that you should wait 60 days before reapplying to avoid further contaminating your credit score.
As for LA, T-Mobile says that it can't comment on its credit scoring policy. The more times you apply for credit in a short space of time, the more likely a lender is to reject the application, according to Equifax.
As you ordered the new phone before the first contract was cancelled, this could have triggered alarm bells. "If an application for new credit is turned down, it's important not to keep applying for further new credit until the individual understands the reasons why they were declined," says a spokeswoman. Each lender will have their own lending criteria and there are a number of reasons why individuals might be turned down."
Luckily you have now successfully taken out a contract with another provider.
• If you need help email Anna Tims at your.problems@observer.co.uk or write to Your Problems, The Observer, Kings Place, 90 York Way, London N1 9GU. Include an address and phone number.
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