New credit system 'may cut debt'

A new recognition evaluation system which could assist forestall many people falling into debt have been unveiled.

Scientists at the University of Edinburgh said their method took business relationship of general economical statuses and not just a person's recognition history.

They believe taking business relationship of involvement rates, consumer assurance and net income will let loaners to measure hazard more accurately.

The men of science trust Banks and edifice societies will now prove the system.

Most Banks and recognition card suppliers pull on information such as as an individual's debt payment history, business and how many modern times they have got moved home.

Professor Jonathan Crook, of Edinburgh University's Recognition Research Centre, said his diagnostic tests using the other criteria were more than accurate in predicting debt defaults.

'Higher risk'

He said: "Increases in net income and the FTSE index - which are indexes of a improving economic system - all supply statuses for decreased hazard of default.

"On the other hand, higher involvement rates, greater unemployment and rising house terms - which have got a direct impact on people's pockets - all consequence in a higher risk.

"So, too, makes greater consumer assurance because people pass and borrow more.

"We have got establish that this makes let better anticipations that some people will default."

The figure of people being turned down for recognition card game have soared recently, with companies also increasing the fees and rates they bear down as a consequence of the planetary recognition crunch.

Financial website MoneyExpert.com said an estimated 3.27 million people had recognition card applications rejected in the six calendar calendar months to the end of September, 17% More than during the former six months.