Nearly 8 million people in the UK find it difficult to get credit even though the number of people falling into credit difficulties has declined, according to independent market analyst Datamonitor.

The number of UK adults considered a credit risk by lenders has fallen by 400,000 since 1998.

In recent years more emphasis has been placed on conciliation and negotiation than pursuing debtors through the courts. Alex Boorman of Datamonitor

Low interest rates and low unemployment - helping borrowers to keep up with repayments - are seen as the main reasons for the falling number of Britons with poor credit records.

But despite this decline more than one in five, 21%, of the UK adult population are defined by banks as 'non-standard'.

Viable risk

A 'non-standard' individual is a catch-all term to describe people that find it difficult to get credit.

Many people are turned away because they are deemed not 'normal' by the credit industry.

In particular, those such as the self-employed or others who cannot provide sufficient proof of income find it difficult to convince lenders that they are a viable risk.

In addition, people are commonly refused credit because they have defaulted on a loan or have County Court Judgements (CCJs).

Repossessions fall

However, the number of new CCJs against individuals has fallen during recent years.

In 2001, 700,000 CCJs were issued against bad debtors compared with 1.2m back in 1995.

In addition, house repossessions are also on the slide according to Datamonitor.

During the first six months of 2002, 6,860 homes were repossessed compared with 16,980 after the first six months of 1997.

A healthy economy and lenders taking a more sympathetic approach to bad debtors lie behind the fall in repossessions and CCJs according to Alex Boorman of Datamonitor.

"In recent years more emphasis has been placed on conciliation and negotiation than pursuing debtors through the courts," he said.

"As a result more consumers are able to avoid acquiring CCJs by negotiating with their creditors."