Acceptable number of credit searches

sparrowlung

I may need to get a credit search for a mortgage from Alliance and Leicester in the next week. My credit history is generally good but I have had 10 credit searches over the past year of which 3 were in the last six months with 5 of the others occuring almost a year ago. Does anyone know whether lenders look at the history over the past six months or take the full year into account when scoring you.

peterg1965

I would think that the A&L would look carefully at the number and type of credit searches on your file. For instance if you changes home phone providers the new company conduct a search this can hardly be considered the same as applying for a HP or other mortgages. In my humble opinion I reckon you should be OK with having 3 seraches in the last 6 months, but you can never tell. At the end of the day it is the judgement of the person checking your file when you apply for an A&L mortgage who will decide. If you are dealing in the branch maybe you could explain to the mortgage advisor what the searches were for, worth a go.

Finally, I also believe that mortgage companies also check credit files to ensure that you are being entirely honest when you declare your debts.

Hope this helps. Pete

village_life

lenders look broadly at the state of your credit record, not to say that they have defined thresholds of X searches in X months is too much....

I was the opposite, in late 2004 I noticed a couple of naughties on my credit record, errors of judgement from me, and also found that since companies have thrown credit at me, but I hadnt used any of it - that was equally bad - i.e. why would a company give you credit when you dont use it!

So i set about paying for everything on my CC last year and clearing balance at the end of the month, and over 12 months that helped my score.... however, in this time i wasnt pursuing any new credit cards etc - so that hurt me again while i was trying to improve things!

so theres no way to win really

as i said, the companies want to see some activity, but not too much - my mortgage advisor told me that 1 search per month is about right, it shows your active in the market etc - however if you have 4 loan searches in the past 3 weeks, that shows desperation so the lender may look a bit more closely......

Barney088

There is no golden rule, I wouldn't agree that getting searches, about once a month is a good idea though.

Lenders like to lend to borrowers, I mean they will lend to you if they can see a track record of borrowing elsewhere. That is the criteria with a few lenders, no other debt, no mortgage.

I've never heard a Lender decline a case because you hadn't been searched before, I think the main thurst of the question relates to being searched too much.

The way lenders think is typically on a cynical way, if you have been searched twice already then you must have been declined before so they are already thinking what did the other lenders find out?

With this in mind the TYPE of search is going to be key. THey will see a previous footprint from the TYPE of lender, be tis personal loan, credit card or mortgage lender, even utility bills will search you on occasion.

So in your case, what type of lender searched you? If it was a mortgage lender you may be advised to comment on the reasons why you were searched and why these applications didn't go through. Lenders do have a system of talking to each other so you can;t get away with fraud. But if you were just shopping for a mortgage then tell them. If the property fell through then let them know.

If the searches were for credit cards, you don't need to worry too much, maybe let them know your concerns (or your broker) and give them the story behind it. Fill in the blanks for the Lender or they will jump to their own conclusion.

I agree with Peter, three seaches in six months is not excessive.

beckstrous

Blimey, this credit search business is a bit of a worry! I was told by my bank just before getting a credit card that I had a good credit rating because I had had a loan of £16k and paid it all off (early). They said if I got a credit card, my score would go up further. So I got one and use it sometimes - but not that often - and always pay it off immediately.

I hope my credit record is still good because we have just applied for a mortgage and are waiting to hear back about that. We were credit scored about 6 months ago in order to move into rented accomodation and I was also credit scored recently when I opened a different bank account - my boyfriend has never had any loans other than a student loan but would also have been credit scored recently as he opened a few bank accounts, trying to organise his savings.

I hope they don't reject us for something stupid like the fact that he has not had significant debts...

mr_fishbulb

This credit search thing has got me worried too. In November I started saving for a deposit for a house and decided to get my svings into shape. I opened a current account, an ISA and a cash-back credit card, plus a smile account for the wine.

How far back do lenders worry about credit searches? Will I be fine if I don't apply for anything in the next 6 months?

sparrowlung

Barney088 wrote:

There is no golden rule, I wouldn't agree that getting searches, about once a month is a good idea though.

Lenders like to lend to borrowers, I mean they will lend to you if they can see a track record of borrowing elsewhere. That is the criteria with a few lenders, no other debt, no mortgage.

I've never heard a Lender decline a case because you hadn't been searched before, I think the main thurst of the question relates to being searched too much.

The way lenders think is typically on a cynical way, if you have been searched twice already then you must have been declined before so they are already thinking what did the other lenders find out?

With this in mind the TYPE of search is going to be key. THey will see a previous footprint from the TYPE of lender, be tis personal loan, credit card or mortgage lender, even utility bills will search you on occasion.

So in your case, what type of lender searched you? If it was a mortgage lender you may be advised to comment on the reasons why you were searched and why these applications didn't go through. Lenders do have a system of talking to each other so you can;t get away with fraud. But if you were just shopping for a mortgage then tell them. If the property fell through then let them know.

I had two credit searches with Nationwide for an additional loan: one in Jan 06 and the other in September05. My only other credit search in the past 6 months was for a stupid store credit card that I didn't really want anyway and immediately cancelled. I had about 4 credit searches in Feb 05 for interest free credit cards.

As an aside I'd strongly recommend anyone uncertain of their credit history should consider obtaining their credit file from Experian, Equifax or Callcredit as these are the three credit-searching companies the lenders use. Experian let you view it for free on a 30 day trial basis.

YorkshireBoy

Barney088 wrote:

...even utility bills will search you on occasion.

But these should, in the main, be ID checks/unrecorded enquiries and, as such, are not visible to other lenders searching your file.

So in your case, what type of lender searched you? If it was a mortgage lender you may be advised to comment on the reasons why you were searched and why these applications didn't go through. Lenders do have a system of talking to each other so you can;t get away with fraud. But if you were just shopping for a mortgage then tell them. If the property fell through then let them know.

If you're shopping around for a mortgage/re-mortgage, then make sure you ask the lender to carry out a 'quotation' search only. This type of search is not seen by other lenders. Only agree (ie sign for) a full credit search once you've decided who you're going with.

For more information, download/view online Experian's "Your credit report explained" booklet from http://www.experian.co.uk/consumer/index.html