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As a responsible lender, we take into account your personal circumstances when opening accounts or establishing the appropriate level of credit to grant you. To help us do this, applications may be assessed using a process called credit scoring.
Credit scoring takes into account information provided directly by you, any information we may hold about you, and any information we may obtain from other organisations. Where we use information from other organisations, which may include a licensed CRA (see Credit Reference Agencies section below).
If we decline your application due to information we obtained from a CRA or if you ask us, we will tell you which credit reference agency we searched; but details of how you manage your accounts may be disclosed to all the credit reference agencies. You have a right to apply to the credit reference agencies for a copy of your credit file. They may charge a fee for this information.
More information about how we use credit reference agencies can be found in our Privacy Notice. Information about the credit reference agencies can be found at the following websites:
Credit scoring works by evaluating your credit history, payment patterns and other financial behaviours to generate a numerical score that lenders use to assess your creditworthiness and determine the likelihood that you will repay a loan. When your score reaches a certain level then we will generally agree to your application. If your score does not reach this level, we may not. Sometimes scores are calculated by a CRA and we may use these in our assessment.
The scores allocated are based on thorough analysis of large numbers of repayment histories over many years of providing credit. This statistical analysis enables us to identify characteristics that predict future performance. For example, past analysis shows that people who have county court judgements registered in their name have proved to be less likely to meet payments than those without judgements.
Credit scoring produces consistent decisions and is designed to ensure all applicants are treated fairly.
Additionally, we have policy rules to determine whether we will lend. These reflect our commercial experience and requirements. For example, if we have direct evidence that you have shown poor management of credit products in the past we may decline your application.
Every application to open an account or borrow money involves a certain level of repayment risk for the lender, no matter how reliable or responsible an applicant is. Credit scoring enables us to calculate the level of risk for each applicant based on the information we have obtained. If the level of acceptable risk to us is exceeded, we will not accept the application.
This does not mean that any declined applicant is a bad payer. It simply means that based on the information available to us, we are not prepared to take the risk of opening that account or granting that credit facility. Lenders are not obliged to accept an application.
Lenders have different lending policies and scoring systems, and so applications to them may be assessed differently. This means that one lender may accept your application but another may not.
If your application is declined, this will not be disclosed to the CRA. However, they will keep a record of the search on your credit file which may be seen by other organisations.
We believe that credit scoring is fair and impartial.
It does not single out a specific piece of information as the reason for declining an application. We test our credit scoring methods regularly to make sure they continue to be fair and unbiased.
Responsible lending is essential both for the good of applicants and lender.
Applicants with county court judgements may find credit difficult to obtain.
If we’re unable to accept your application, we’ll tell you. Unless it’s unlawful to tell you, we’ll also tell you the principal reason why we were unable to agree to your request, for example, if you don’t pass our credit score we’ll tell you.
If we’ve declined your application you may contact us and ask us to reconsider our decision. We will usually ask you to provide additional information, which was not available at the time your original application was submitted.
When you apply for some products, we may be able to provide you with a decision straight away without referring you to a member of our staff. This is called an automated decision. If we decline your application in this way, you will have a right to ask for your application to be reviewed by a member of our staff.
If you’d like to ask us to reconsider our decision, please call us on 03 456 100 130 and we’ll review your application and tell you how long it will take until you receive a response.
If following the appeal you are still unhappy with the response you have received, you should write to:
Customer Relations Team
first direct
40 Wakefield Road
Leeds
LS98 1FD
The bank uses Credit Reference Agencies (CRAs) to help make its lending decisions and identify customers. They do this by compiling and providing public and credit account information.
Public information includes Electoral Register information supplied to local authorities by householders each autumn. The bank uses this information to help confirm names and addresses. Public information also includes information on County Court Judgments, Scottish Decrees, Bankruptcies, Individual Voluntary Arrangements and Administration Orders.
Credit account information includes data supplied by registered lenders on how customers manage their credit agreements. This allows the bank to check when someone applies for credit that the person applying has repaid or is repaying other lenders.
When the bank (or any lender) processes an application that may involve credit, it searches the database of one or more of the Credit Reference Agencies for information about the applicant at current and previous addresses.
The agencies keep a record of all searches and this allows the bank to see when and how many times other lenders have accessed the applicant's credit information.
We may make periodic searches of HSBC Group records, Credit Reference and Fraud Prevention Agencies to make decisions regarding your account including whether to make credit available or to confirm or extend credit.
For an application which may involve borrowing, your CRA records may be cross checked with others who are financially linked to you because of other joint financial commitments. This is known as a financial association and this process enables lenders to form an accurate view of the existing financial commitments of customers.
Where a joint application is made a new financial association will be created and registered with the CRA, if this does not already exist.
You should be aware that where you have a financial association, information relating to the associates may be taken into account in applications which may involve credit. This means, where one person applies for a credit facility, their credit history together with that of existing or previous partners with whom they have a financial relationship may be associated and taken into account when assessing their application.
Any association will continue until one of you successfully files a 'disassociation' at the Credit Reference Agency.
For more information about financial associations for business account applications, please contact the CRAs directly.
If you apply for a product or service with another person and they are not present, you are declaring that you are entitled to disclose information about your fellow applicant and you should discuss this with them, and share this information with them before submitting the application.
If you believe you have been treated as 'financially associated' due to a previous joint financial commitment but that your records should no longer be associated, then you can register this 'disassociation' by contacting and gaining agreement through the CRA’s.
To prevent crime, to verify your identity and to recover debt, we will exchange information (both within the UK and, where appropriate, overseas) with other members of the HSBC Group, and where appropriate, debt recovery agencies, Fraud Prevention Agencies and other organisations including other lenders.
If you provide false or inaccurate information and fraud is identified, details will be passed to Fraud Prevention Agencies.
Please see the section on “Fair Processing Notice for Data Sharing with Fraud Prevention Agencies” for more information.
Law enforcement agencies may access and use this information.
We and other organisations may also access and use this information to prevent fraud and money laundering, for example, when:
As part of the processing of your personal data, decisions may be made by automated means. This means we may automatically decide that you pose a fraud or money laundering risk or if our processing reveals your behaviour to be consistent with that of known fraudsters or money launderers; or is inconsistent with your previous submissions; or you appear to have deliberately hidden your true identity. You have rights in relation to automated decision making please contact us using the details provided.
Whenever fraud prevention agencies transfer your personal data outside of the UK and the European Economic Area, they impose contractual obligations on the recipients of that data to protect your personal data to the standard required in the UK and the European Economic Area. They may also require the recipient to subscribe to 'international frameworks' intended to enable secure data sharing.