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Credit scoring, credit reference and fraud prevention

Assessing applications for credit

As a responsible lender, we'll take your personal circumstances into consideration when opening an account or establishing the appropriate level of credit to offer you. To help us, we use credit scoring.

How does credit scoring work?

Credit scoring uses any information you provided, any information we already hold on you, and any information we can get from other organisations to assess if we should lend to you.

Where we use information from other organisations, which may include a licensed credit reference agency, we'll tell you who they are if you ask.

The credit scoring system allocates points for each piece of relevant information and adds these up to produce a score. When your score reaches a certain level, we'll generally agree to your application. If your score fails to reach this level, we might not. Sometimes scores are calculated by a credit reference agency and we may use these in our assessment.

The points allocated are based on years of lending data and thorough analysis of thousands of people's repayment histories. Our statistical analysis identifies characteristics that predict future behaviour, and things like County Court Judgements give us an indication about the risk of lending to you in the future.

Plus, we also have our own rules to determine when and when not to lend. These reflect our commercial experience and requirements. For example, if we have direct evidence that you've shown poor management of credit products in the past we may decline your application.

If your application is declined, this will not be disclosed to the credit reference agency.

Is credit scoring fair?

We think so, yes. We believe credit scoring is fair and impartial. It doesn't 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 better for everyone.

What happens if your application is declined?

If we're unable to accept your application, we'll tell you. We'll also tell you the principle reason why we were unable to help.

If we've declined your application you can ask us to reconsider our decision - but you should know that unless you have some new information for us, the answer will probably be the same.

If, following the appeal, you're still unhappy, you should write to:

first direct customer relations

40 Wakefield Road


LS98 1FD

Credit reference agencies

We use credit reference agencies to identify customers and to help us decide who to offer credit to. They do this by compiling public and credit account information.

Public information includes details from the Electoral Register. We use this information to help confirm names and addresses. Public information also includes County Court Judgements, 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 us to check when someone applies for credit, that the person applying has repaid or is repaying other lenders.

When we (or any lender) process an application that may involve credit, we may search the credit reference agency databases for information about the applicant at current and previous addresses. The agency keeps a record of all searches and this allows us to see when and how many times other lenders have accessed the applicant's credit information.

How will financial associations affect my credit score?

If you share a financial commitment with someone, a financial association is created. So when you're applying for credit, we may also cross-check for financial associations. This gives us a more accurate view of your existing financial commitments.

Where a personal application is made with another party, a new financial association will be created and registered with the credit reference agency, if this doesn't 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. This is irrespective of whether the request for credit is in your sole name or includes an associate.

Any association will continue until one of you successfully files a 'disassociation' at the credit reference agency.

Financial associations are not created for business account applications.

If you apply for a product or service with another person and they're not present, you're declaring that you're entitled to disclose information about your fellow applicant. Plus, you authorise us to search, associate and/or record information at credit reference agencies about you and your fellow applicant.


If you believe you've been incorrectly treated as 'financially associated' because of a previous joint financial commitment, you can register a 'disassociation' by contacting the credit reference agencies. Details of the credit reference agencies we use are available on request.

Crime prevention, debt recovery & fraud prevention agencies

To prevent crime, confirm your identity and recover debt, we may exchange information (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.

Law enforcement agencies may access and use this information.

We, and other organisations, may also use this information to prevent fraud and money laundering, for example, when:

  • checking details on applications for credit and credit related accounts or other facilities
  • managing credit and credit related accounts or facilities
  • recovering debt
  • checking details on proposals and claims for all types of insurance
  • checking details of job applicants and employees.

We, and other organisations, may also use information recorded by fraud prevention agencies in other countries.


If you'd like details of the relevant credit reference and fraud prevention agencies we use, you can call or write to:

The Fraud Manager

first direct

40 Wakefield Road


LS98 1FD

Telephone: 03 456 100 100

A copy of information held about you at a credit reference agency is available to you directly from the agency (a small fee may apply).