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Last Updated: Saturday, 1 March 2008, 14:02 GMT

Services personnel credit battle

By Bob Howard
BBC Radio 4's Money Box

British soldier
Not all service personnel register on the electoral roll

Some people serving in the armed forces abroad for long periods are struggling to get credit quickly.

Many are only registered with British Forces Post Office addresses and are not on the electoral roll.

That means when they apply for a mortgage, it can take weeks for lenders to verify their details.

The Ministry of Defence issues guidance to personnel serving abroad but some MPs are calling for it to liaise more closely with lenders.

Lengthy credit checks

Whenever someone applies for a mortgage, lenders have to verify their address, check if they are on the electoral roll and assess their credit worthiness.

They are not used to dealing with people from the armed forces
'Dave', British soldier
"Dave" spent around four and a half years serving abroad.

When he applied for a mortgage it took six weeks simply for his lender to confirm where he had been living:

"I never expected it to take that long - I couldn't get traced through my own address, my barracks address or the garrison.

"They are not used to dealing with people from the armed forces."

Services personnel can turn to some specialist financial firms.

One is called Forces Financial.

Its managing Director Al Voice says "Dave's" experience is shared by others:

"The scale that these lenders operate to nowadays is all about pushing the simple things through very quickly, anything off the norm is a problem to them."

UK details important

It is the job of the credit reference agencies to check our credit histories and the basic facts about us on behalf of lenders.

One of their most important sources of information is the electoral roll.

You might want to consider using a family address in the UK where you might be registered to vote already
James Jones, Experian
But not all service personnel register on it, and of those that do, only those who choose to give a family address in the UK can have their details checked by the credit reference agencies.

And although some maintain UK bank accounts when they are abroad, they will not have a history of paying things like credit card or mobile phone bills, which also helps the agencies decide if we are a good bet to lend money to.

Such is the importance of the issue that some MPs are campaigning for change.

One is Mark Pritchard, who is the MP for the Wrekin in Shropshire:

"I think the Ministry of Defence needs to do far more in educating armed forces personnel and I think the credit reference agencies and mortgage lenders need to have specialist teams and trained personnel to deal specifically with applications from armed forces personnel."

Reference agencies aware

The three big ones, Experian, Equifax and Call Credit say they are aware of this issue and have met with the Ministry of Defence to discuss it.

James Jones from Experian says services personnel can take practical steps to make sure they are not at a disadvantage when they apply for a mortgage:

"You might want to consider using a family address in the UK where you might be registered to vote already."

The Ministry of Defence advices people serving in the armed forces to keep a UK bank account open when going abroad, to help with credit checks when they return.

BBC Radio 4's Money Box was broadcast on Saturday,
1 March 2008 at 1204 GMT.


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