Banks and credit companies in France can refuse a loan application if they judge that a borrower is not creditworthy, and consumer groups say there are several concrete steps people can take to understand and challenge that decision.
When a bank or lender receives a credit application, it assesses the applicant's ability to repay. If it judges that ability to be poor, it can turn down the request. Lenders most commonly cite insufficient or irregular income, or the absence of a guarantor, as reasons for refusal.
Multiple applications and shared records
A second common cause is applying for credit with several lenders belonging to the same banking group within less than six months, according to France's data protection authority, the Commission nationale de l'informatique et des libertés (CNIL). Lenders in the same group generally keep records of an application for six months, allowing them to review any future requests more quickly. In some cases involving ongoing legal proceedings, they may hold the data for longer under strict confidentiality rules, but the CNIL says they can never keep it indefinitely.
A third possible reason for refusal is that the applicant is listed on the Fichier national des incidents de remboursement des crédits aux particuliers (FICP), a national register of individual loan repayment problems. The register is designed to prevent over-indebtedness by stopping new credit from being granted to people already in financial difficulty. According to the Banque de France, the country's central bank, a person can be added to the register for falling behind on loan repayments, for an unresolved bank overdraft, or for having an over-indebtedness case under review.
How to challenge a refusal
If a lender turns down an application and the borrower believes the decision was based on incomplete information, they can ask the lender's customer service department to re-examine the file by submitting additional documents.
As a last resort, borrowers can turn to an independent mediator. If the refusal came from a credit company, they can contact the mediator of the Association française des sociétés financières (ASF), a trade body representing French financial companies. If the refusal came from a bank, the borrower can contact that bank's own mediator instead.
Anyone listed in a financial institution's customer file can also ask the lender for a copy of the information it holds on them. The CNIL notes that, depending on what that information shows, individuals have the right to demand that any personal data that is inaccurate be corrected or completed.
Getting off the FICP register
Borrowers refused credit because they are listed on the FICP can contact the Banque de France to find out who registered them, on what date, and for what reason.
How long a listing stays on file depends on the reason for it. A listing linked to late loan repayments lasts a maximum of five years, and can be cleared earlier by paying off the outstanding amount.
For those listed following an over-indebtedness case, the listing lasts up to seven years for a standard debt recovery plan or a measure imposed by the over-indebtedness commission, or up to five years in the case of a personal recovery procedure.
A listing can be cleared at any time if the borrower is able to pay everything owed to creditors. Otherwise, if there is no payment incident during the first five years of a standard recovery plan or imposed measure, the listing is automatically erased once those five years are up, without the borrower having to wait the full seven years.
