In a study conducted by Equifax, about two-thirds (63 per cent) of the firm's customers were refused loans and other types of credit over the course of last year. Such a figure represents growth from the 54 per cent recorded in 2006. The findings come after a recent Bank of England credit conditions show indicated that lenders have cut access to secured loans during the last three months of 2007. In addition, banks were also shown to be cutting back on access to various forms of unsecured credit. This, Equifax claimed, is placing more "pressure on flagging consumer spending".



Commenting on the figures, Neil Munroe, external affairs director for the firm, claimed that the study backs industry expectations that the credit crunch of last year will have an impact upon lending criteria. He stated: "Clearly this presents a challenge for consumers looking to get new credit in the early part of 2008. It also highlights the need for a greater understanding of the factors that influence an individual's ability to get new credit."

The findings also indicated that about half (49 per cent) of those who were turned down for a loan do not know the reason for this rejection. However, among people who are aware of why they were rejected, 52 per cent report that it is because they have missed demands for payment on other borrowing agreements. This figure represents a growth from the 28 per cent recorded in 2006. The Equifax director pointed out that the result of interest rate rises over the past 12 months are having a "real impact on consumers' financial management".

Mr Munroe added: "While some of the findings of our survey are shocking, it is not a complete surprise. With a number of interest rate rises during 2007 many consumers have been feeling the pinch and have perhaps fallen behind with payments. But with tightening lending criteria in the aftermath of the credit crunch, lenders will be looking more closely at applicants' credit histories. And late payments could be enough reason to refuse a loan."

Research from the online credit information provider also revealed that an increasing number of people are getting a copy of their financial file before they apply for a loan. In 2006, more than half (53 per cent) of prospective borrowers did not check their report, however last year this level dropped to 40 per cent. As a result, Equifax urged consumers to get an up-to-date credit file to make sure that it reflects their personal financial circumstances and boosts their chances of getting a cheap loan. In doing so, it was suggested that they can judge how likely they will be to receive a loan.

Those concerned about their ability to manage their money over the coming months may be well advised to take out a copy of their financial history before applying for a personal loan. Sean Gardner, chief executive of MoneyExpert, reported that those who have a poor credit rating as a result of missing previous demands for payment may find that their access to future borrowing is curtailed. He added that those experiencing problems with their money management "need to get their debts under control and cut their spending". Consequently, a cheap loan may prove a useful means of paying off various financial demands.