Credit blacklist hits 4 million people

As many as four million people fear they have damaged their credit rating beyond repair after falling into financial difficulty, according to new research from AXA.

The company polled people on the effects of their money troubles and found that whilst almost four million claim to have been blacklisted because they have not been able to keep on top of their finances, almost a quarter of these (around 944,000) aren’t even in financial difficulty, but who have tried to help friends or family that are having money problems.

And AXA believes the situation could be even worse following the Government’s announcement that it has lost 25 million personal data records from the HM Revenue & Customs database. The losses have left millions vulnerable to ID fraud which could affect people’s credit records.

An address itself cannot be blacklisted – however credit reference agencies hold information attached to individuals at the addresses where they live or have previously occupied. A poor credit rating can affect people’s ability to open a bank account, get certain jobs or even apply for a mortgage.

Steve Folkard of AXA commented, “Money problems affect people in a variety of ways, but one thing we are all wary of is the possibility of being blacklisted. The term used to mean that creditors were distrustful of applications from your address, but more recently it refers to individuals, regardless of where you live.

“Money worries are as much a social issue as they are a financial one. This is another example of how getting into financial difficulty can affect you and those around you if you rely on others for financial support. The knock-on affects of having a poor credit rating can be endless, as it becomes increasingly difficult to access credit.

“Getting blacklisted is down to a number of factors but not paying your bills is a sure fire way to worsen your credit rating - being on top of your finances is a must.

“We are trying to highlight to people the need to take action. If you’ve got financial problems, there is a solution - but on an individual level and for the nation as a whole, we need to recognise that decisive action is the only way to solve the problem. Otherwise we will simply spiral further and further into debt.”

The AXA research shows that 45-54 year olds are most likely to be blacklisted. One in five (20%) of those who have been affected by money worries said they have been blacklisted as a result of failing to manage their money problems.