What is a Credit Blacklist

17th Dec 2024

Many people worry that if they've been refused credit or have a poor credit history, they might be on a "credit blacklist." This concern is especially common among those who have missed payments or received a County Court Judgement (CCJ). But a credit blacklist a real thing, or just an urban myth? You won’t see a big black stamp over your credit rating if you access your credit score online, but is there another level of information which lenders will be able to see?

Is There a Credit Blacklist?

So let’s answer the easy question first - there is no such thing as a credit blacklist. There isn't a centralised list of "risky borrowers" kept online somewhere that lenders and credit reference agencies use to decide who to lend money to. Instead, lenders rely on the information in your credit report to assess your creditworthiness. However, factors like bankruptcy or a CCJ can still influence their decision to approve or reject your credit application, and so it is true that if you have a lengthy history of missing payments or getting into financial difficulty, then you will find it almost impossible to get a new loan. That doesn’t mean that your name is on any “do not lend” list though.

Can an Address Be Blacklisted?

Another common myth is that lenders have a blanket ban on extending credit to people who live at a particular address, or who live in a certain postcode area. Addresses themselves cannot be blacklisted either. Even if previous residents of your address had poor financial histories, these issues won't affect your credit score. Your credit score is based solely on your financial history, not your address.

Will Living With Someone With Bad Credit Affect My Credit Score?

This is where the system does get a bit more complicated. Your credit score will not be affected by the financial situation of anyone you live with, such as a spouse, family member, or housemate, unless you are "financially associated" with them. A financial association is only created if you have a joint account or apply for joint credit such as a mortgage or loan with someone. Even without a successful joint application, the association can remain if a joint account was opened and then closed. If the person you're linked with has CCJs or significant debt, it may be harder for you to obtain credit.

What is the Role of the Credit Reference Agencies?

Credit reference agencies like Equifax or Experian do not make lending decisions. They collect and provide data about your financial history, such as your credit agreements and any court judgments. Lenders use this information, along with their own criteria and scoring tools, to make decisions about granting credit. Each lender has its own criteria, which can vary widely. Some may be strict and not lend to individuals with a history of missed payments, while others might be more lenient, potentially offering credit at higher interest rates to those with past financial issues.