Some customers may benefit from Egg credit card withdrawal
February 19, 2008
Officials from the UK’s credit reference agencies have stated that many customers that have been affected by lending giant Egg’s decision to withdraw over 160,000 credit cards could actually benefit in terms of their creditworthiness. According to Egg officials those having their credit cards withdrawn were consumers whose credit rating had fallen since they opened their accounts, but research has shown that many of those that were affected actually had very good credit and repaid their cards responsibly.
Credit reference agencies have stated that the withdrawal of credit card facilities by Egg will not leave any black mark on customers’ credit files, and because the account will be classed as closed and settled this will improve the creditworthiness of the customer. Some industry officials have stated that Egg has decided to dump many customers simply because it is not making enough money from them rather than because they have bad credit.
One official from the credit reference agency Equifax stated: ‘We don’t flag up whether an account has been withdrawn; we just highlight whether an account is open or settled. So in some respects, the Egg withdrawal of cards could work in a person’s favour.’
He added: ‘We log that you have paid off a credit card balance, which will look good in the eyes of lenders. Also, one piece of advice I have always given people is - if you are rate tarting you should never leave a card open once you have moved the balance as the lender will only see the number of cards in your name. If you have too many cards you may be seen as too much of a risk. The Egg closure may help you also by reducing your card number and therefore increasing your creditworthiness.’
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