TotallyMoney, the personal finance app, has introduced a new feature aimed at improving the credit card application process.
Called TotallySure, the feature provides pre-approval to applicants, increasing the likelihood of acceptance pending final checks.
With millions of UK adults experiencing credit rejection and facing potential downselling practices by lenders, the introduction of this feature aims to address these challenges. By offering pre-approval to applicants, subject to final checks, the aim is to potentially increase the likelihood of acceptance.
Spotlight on application woes
Over the course of a year, lenders rejected credit applications for over nine million adults, with one in 20 individuals experiencing three or more declines. Multiple applications within a short timeframe can signal risk to lenders, potentially leading to continued rejection and inferior offers.
Moreover, banking regulations mandate that only 51 per cent of customers receive the advertised Representative APR, leaving nearly half susceptible to receiving different terms than expected. However, a mere 19 per cent of individuals believe lenders adequately communicate this discrepancy.
Research conducted by TotallyMoney discovered that a significant portion of credit card providers fail to provide pre-application product summaries or display the full range of possible APRs, contributing to consumer confusion.
Notably, popular credit card offers, such as those from Barclaycard and HSBC, may advertise one APR and offer duration but could provide different terms upon application. Additionally, only 40 per cent of consumers are aware that they might receive a different APR or credit limit than advertised.
TotallySure
TotallySure offers several guarantees to improve the credit card application process. Pre-approval reduces hard searches on credit files, ensuring that applicants are likely to be accepted, while a guaranteed APR provides clarity on borrowing costs, avoiding potential surprises. Additionally, guaranteed credit limits offer certainty on available funds, and guaranteed balance transfer and purchase durations ensure that customers receive the advertised terms without downselling, enhancing financial planning and transparency.
Commenting on the launch, Alastair Douglas, CEO of TotallyMoney, stressed the importance of transparent financial information and ensuring that customers receive what they see advertised.
“Now more than ever, people need to be able to take total control of their finances — and a big part of that is knowing where they stand when applying for credit,” explained Douglas. “That includes knowing the level of interest you’ll be paying, the credit limit you’ll receive, and how long a zero per cent interest-free period you’ll get.
“But for too long, regulation has allowed the banks to treat credit card applications as if they were a lottery — and to make things even more concerning, many people aren’t even aware they’re gambling with their finances. Lenders need to be upfront with customers about how products and services work, while ensuring they’re easily comparable. Key to that is by making sure that what people see is what they’ll get.
“Which is why we launched TotallySure. And to help raise industry standards and improve transparency, TotallySure offers are now recognised by our proprietary product ranking algorithm — Match Factor. As such, cards with the TotallySure badge will receive an upvote on our tables, making them more prominent to our customers, while helping lenders find more suitable borrowers, reduce costs, and improve trust and brand loyalty.”
