Many "experts" blame the epedemic of credit problems in current society on factors such as lack of stable permanent employment, relegation of importance of marriage and the family unit, inadequate healthcare and insurance provision and failing government support for established industry.

However there have always been redundancies, marriage break ups, unexpected bills, health problems and every other logical reason for people to have problems with existing financial commitments, so why do these situations now cause so many problems for individuals and families in the western world (the UK and USA in particular).

Well the first reason is simple, prior to the existing "big brother" situation it was possible to encounter temporary financial problems and to recover from them over a period of time no harm no foul as long as debt was repaid. Most companies would be happy to deal with you again as they can see you had problems but made the effort to overcome them. Other companies would also be happy to deal with you as they probably would not even know about past problems. This is not the case nowadays, every missed/late payment is there for all the world to see!

Secondly, in the past during hard times it might have been possible to obtain further borrowings from a helpful local bank manager sympathetic to your current situation to see you through times of adversity, again this is not the norm today, the bank manager can still be sympathetic, but its the computer that makes the decisions and if you are behind with existing commitments and this is reflected on your credit file the chances are the computer will simply say no!

Thirdly credit never used to be so easy! Back to the local manager/advisor again, you would be expected to show how exactly how you can repay the borrowings and go through existing commitments, nowadays its easy to lie on an application form or internet site with no face to face meetings, many people borrow beyond their means.