Important Alert from Martin Lewis for Those Considering Getting a Loan – Even with an Excellent Credit Rating

Martin Lewis has issued a stark wake-up call to people who have applied – or wish to apply – for credit. 

Martin Lewis, the 52-year-old founder of Money Saving Expert, explained on an episode of The Martin Lewis Podcast that individuals with ‘a perfect credit score’ may be surprised when they get rejected from an application.

This mysterious number is calculated by a credit reference agency and reflects how likely a person is to repay borrowed funds, as stated on the Lloyds Bank website. Generally, an individual’s ‘score’ is influenced by their past borrowing behavior and various other factors.

Yet, while it’s normal to be reassured by a healthy number, the pro warned that people with a high rank shouldn’t be complacent.

According to Martin, “The credit score provided by credit reference agencies is simply an approximate indication of how a typical lender might assess you.”

‘You don’t have a single number that dictates your credit rating or your credit score in the UK. Each lender scores you differently based on its own profitability wish list.’

In the podcast, he was also eager to draw attention to the fact that, unbeknownst to most people, lenders look at other information beyond a person’s credit score when assessing a credit application. 

While lenders are ‘getting information from your credit file – that’s what’s on your credit score,’ they’re also looking at ‘any past dealings’ they’ve had with the applicant.

And, while such past dealings can affect the outcome of someone’s credit application, lenders in fact rely just as much on a third key source of information: the individual’s application form. 

‘And crucially, [lenders] are getting information from your application form,’ Martin reminds listeners. 

It may seem obvious, but people tend to forget that the application form matters insofar as it details their income which, in turn, indicates whether they will be able to repay or not. 

‘The big thing that’s on there that isn’t your credit file is your income,’ the finance guru explained.

‘And that makes a massive difference because when you apply for products, lenders aren’t just looking at your credit score, trying to predict your future behaviour based on your past.

‘They’re also doing an affordability score.’

While someone might have a perfect credit score, which shows that they behave well financially, the reality is that a lender needs to feel confident that the person has ‘the income to repay the product’.

If they don’t, Martin adds, they will ‘still be rejected’.  

Martin’s advice regarding credit applications comes after he warned older women affected by state pension changes to be wise to fake compensation websites, which may encourage them part with their personal information.

Fraudulent websites targeting UK-based pensioners are claiming that compensation is available, Waspi (Women Against State Pension Inequality) campaigners said.

Bogus websites may request personal details from 1950s-born women, make the false claim that a compensation scheme has been announced or even try to give the impression that they are connected with Mr Lewis.

Waspi said that one woman in Derbyshire reported that she had been asked to provide copies of her birth certificate and bank details through an online form, before realising it was a scam.

Martin said: ‘The word scammers underplays the danger, of what are often organised criminal gangs using psychologically adept tactics to steal from people.’

He added: ‘Even if they’re not asking for money, they could be trying to take your information as part of a wider fraud.

‘Be incredibly careful, don’t click advertising or other links on social media, unless it is from a validated trusted source.

‘And to be very plain, I don’t do adverts nor allow anyone to use my name for endorsements. All my information will always be on my site MoneySavingExpert.com, so if you can’t find it there, and see it elsewhere, it’s very likely a scam.’

Waspi chairwoman Angela Madden said: ‘Waspi has fielded dozens of queries from women following an alarming spike in fraudulent websites appearing in recent days.

‘The need for compensation is so urgent that it is the most vulnerable women who are at risk from scammers. The behaviour of opportunists who seek to exploit them is nothing short of disgraceful.’

She suggested that people contact Action Fraud if they have shared sensitive information or feel they are at risk.

Those who are worried they may have been scammed should also contact their bank or building society. Many banks have signed up to the 159 service, which enables people who are worried about scams to get through to their provider on an easy-to-remember number.

Fran McSweeney, head of services at Independent Age, said: ‘While scams can be very sophisticated, there are things people can do to protect themselves.

‘Never be rushed into sharing personal details out of the blue and contact your bank if you think you’ve been tricked into revealing any of your banking details. If what you’re told sounds unlikely or too good to be true, it probably is.’

Waspi is seeking a judicial review to force the Government to reconsider its decision to rule out a compensation package for women affected by the way changes to the state pension age were communicated.

A previous report by the Parliamentary and Health Service Ombudsman (PSHO) suggested compensation ranging between £1,000 and £2,950 could be appropriate for each of those affected.

But in December 2024, the Government said that, while it accepted the ombudsman’s finding of maladministration and apologised for there being a delay in writing to 1950s-born women, a blanket compensation scheme, which could cost taxpayers up to £10.5 billion, cannot be justified.