CREDIT card offers pour through letterboxes across the country as lenders battle for custom. But if you are a virtuous borrower, on time with payments and in control of your debt, you may be in for a nasty shock — they do not want you as a customer.

When it comes to credit card applications, the financially astute are increasingly being rejected. In the past, you had to have a list of county court judgments to your name and a history of reckless borrowing before the banks would give you the cold shoulder. But lenders are now using information held at credit reference agencies to be more picky.

If you have a history of paying debts on time, lenders may be reluctant to take you on or may even turn you down flat. Brian Bufton, above, a 67-year-old retired engineer from Kidderminster, knows what it is like to be unwanted by the big banks. After receiving an unsolicited credit offer from Morgan Stanley in April, he applied for its Platinum card, expecting to be welcomed with open arms.

But Morgan Stanley has yet to reply. Mr Bufton sent two letters of complaint because he could not understand why his application was being ignored, especially as Morgan Stanley had actively sought his business.

Mr Bufton is a virtuous borrower. He has never missed a payment on his Nationwide and Goldfish credit cards and has paid no more than50p in interest since he first borrowed on plastic 12 years ago. When Times Money raised Mr Bufton’s case with Morgan Stanley, the US bank blamed “insufficient address labelling” and “postal delays” for its failure to respond. It said that it has yet to process his application, but insisted that being “too good a customer” would not be a reason for rejection.

However, experts claim that some banks are covertly turning down customers for exactly that reason. Barry Stamp, joint director of Checkmyfile.com, which helps consumers to understand their credit files, says: “We have a steady stream of customers who are turned down for no reason at all. These include people with good jobs who have clean credit files.”

Credit reference agencies store customers’ borrowing histories, past addresses and details of people with whom they share credit accounts. Banks use this information to give you a credit score each time you apply for credit. As well as providing an indication of who is likely to walk away from debts, this enables the banks to identify the most unprofitable applicants who will not pay a penny in interest.

Times Money has learnt that some credit card companies are turning away applicants because they have a low “profitability” score. A shroud of secrecy surrounds profitability scoring, but Nick Wilson, head of research at the Leeds University Credit Management Research Centre, says that the practice has been around for about two years.

Mr Wilson says: “Applicants are put through a scoring system, which in the past was based only on their creditworthiness, but now they are scored on other factors, such as whether they will be profitable customers. People who are going to use the card efficiently and not make the card issuer a profit are being declined. This is increasingly common as people switch cards to take advantage of low-interest offers.”

So-called rate tarts, whose pursuit of 0 per cent credit cards costs the banks £1 billion a year, are rejected because they are likely to walk away after the free credit ends. Young professionals who rent and often move house are also in danger of being unable to obtain a best-buy loan or credit card.

Even a sizeable income may not stave off rejection. A chief executive of a building society told Times Money that despite having a very healthly bank balance he was turned down for a mobile phone after a credit check because he was not on the electoral roll.

How to handle rejection

Credit reference agencies are powerless

to alter data on a credit file if the lender insists that the information is correct. If you and the lender disagree, contact the Information Commissioner (www.informationcommissioner.gov.uk), a body responsible for enforcing data protection laws.

Your rating can be adversely affected by too many credit searches. If you are

applying for a loan or credit card at a bank or building society branch, ask it to carry

out a “quotation” search rather than a full credit check.

If you need help to understand the data on your credit file, you can find guidance on the internet at www.checkmyfile.com.