Live on a military camp or have a BFPO address?

Posted in 'Personal Finance' by Neil Greenhill

31 May 2012

The Labour leader David Milliband has called for a new law to protect military personnel from discrimination in the same way as there is protection from discrimination on the grounds of sex, religion and race. The abuse in question concerned issues ranging from being refused service at bars and restaurants, being shouted at in the street in the street and being refused credit. The Labour Leader made his declaration while visiting the troops in Afghanistan, "My concern is that we must make the principle that no-one suffers disadvantage as a result of service a reality for all and a characteristic that defines the whole of our society."

In fact it has been found that 1 in 4 military personnel have been refused credit as per the findings of a survey conducted for Conservative Peer Lord Ashcroft and we would welcome any changes that made it easier for those returning to civilian life to obtain credit in the same way as the rest of the population. However, in the absence of any legislation at present, is there anything you can do to help avoid being turned down when applying for a mortgage, credit cards or even something as simple as a mobile phone contract?

We often hear from those in the military that they are having problems obtaining credit and we normally find the problems are not the fault of those concerned. In fact it normally comes down to the basic issue of addresses and address formatting. Most BFPO addresses and even many UK military bases cause problems for the credit agencies because the Information Commissioner's Office (ICO) forbids them from keeping data relating to any BFPO address.

This is because the ICO believes that such military addresses often are home to thousands of people, and the risk of having two people at the same BFPO (or other military address) and subsequent wrongful disclosure of personal data is simply too great to bear.

BFPO addresses can't be searched at all, especially where there is no postcode attached to the address, and even if they could, no information could be released by the credit reference agencies because of the ICO’s ruling.

If a lender can't find any information at a military address, it is unlikely to know anything about the ICO’s ruling and this means that they can't judge how you normally use your credit agreements and won't want to take on the risk of providing you the facility.

There is very little that can be done to rectify this situation other than to make sure that your credit agreements and statement addresses are recorded at a non-military, physical address. If you don’t have a suitable civilian address you can obtain a service address from places such as ScanMyPost.com. This will make it much easier for potential lenders to find your credit file and make an informed decision about whether to lend to you.

Also common are complaints from those military personnel who have been turned down for credit when returning to civilian life.

The main problem here is a lack of credit history - you may be in temporary accommodation and not have registered on the electoral roll and you may not have used credit in the past. This could mean you have an empty credit file or less credit history than the average consumer.

Starting a new credit report afresh needn't be stressful. The first step is simply to register on the electoral roll - for those who haven't used credit in the past this will start your credit file - for those who have it will provide a boost to your credit score as it allows lenders to check you reside at the address you have provided to them. From here you can start building your score - current accounts will often be reported to the credit agencies but not always, a credit card can boost your score even if you only spend £5 each month and pay it off before any interest has been charged. Make sure you have a contract mobile phone registered to your new civilian address too. You can quickly build up a credit history to help lenders decide, in essence, whether you pay your bills on time or not.

If you have a history of missing payments or arrears then this will still have the normal consequences on your credit standing, but if not then you should be able to avoid the most common credit reporting problems faced by those in military service .

Neil Greenhill is a Credit Analyst at Checkmyfile and has a degree in Law and Politics from Cardiff University. He is also an Associate Member of the Institute of Credit Management.