Are Credit Searches Unfair

alibat_2

Does shopping around for insurance affect your score? Like many, I have a lot of searches in a small period of time as a result of trying to get the best car and house insurance deals.

loopy.magic

alibat wrote: »

Does shopping around for insurance affect your score? Like many, I have a lot of searches in a small period of time as a result of trying to get the best car and house insurance deals.

Nope, these are known as quotation searches, which means they don't leave a credit search 'footprint' on your credit file. Although you will see them appear on your credit file, they are not taken into account for any credit card or loan applications.

speedbird1973

Credit scoring isn't covered by any regulations. It's not a set code for providers to follow. They don't even have to use a CRA before they make an offer. They can choose whoever they want to lend their money to using whatever criteria they please. There's no point in bleating about whether it's fair or not. It simply doesn't come into it. You want to borrow money, who abide by all of their rules and regulation and criteria. If you don't like it.. sling your hook!

Personally I'd have an IQ test on the application. Anyone with an sub 100 IQ simply doesn't qualify!

inmypocketnottheirs

It is really easy.

If credit is granted, record it.

If it isn't don't.

What is so difficult about that?

~Brock~

I've just noticed this thread....where did this !!!! about the current system being something to do with the FSA come about???

The number of recent credit searches had the potential to affect a loan decision back in the late 1980's (I speak from personal experience). The FSA did not exist until 1997.

One other thing - the FSA do not regulate consumer credit, so they couldn't care less about this issue.....they've got enough on their plates screwing up other markets.

mishca_loves_a_bargain

Madness i tell you, madness.................!!!!!!! X

PROLIANT

Look, I have posted the following scenario on other threads similar to this one;

When you make an application for credit, the bank should run an unrecorded enquiry and give you a yes/no/refer decision.
If you choose to accept the credit limit and APR then a footprint then is left on your credit file(s).

This way you can apply as much as you want until you are sick, this way you will find the best rate and whether you will actually be accepted without damaging your credit score.
This can be done without spending huge amounts of investment in new IT infrastructure and software - the system is already there.

speedbird1973

PROLIANT wrote: »

Look, I have posted the following scenario on other threads similar to this one;

When you make an application for credit, the bank should run an unrecorded enquiry and give you a yes/no/refer decision.
If you choose to accept the credit limit and APR then a footprint then is left on your credit file(s).

This way you can apply as much as you want until you are sick, this way you will find the best rate and whether you will actually be accepted without damaging your credit score.
This can be done without spending huge amounts of investment in new IT infrastructure and software - the system is already there.

But the credit providers want to now how many times you've applied for credit. You agree to this when you agree to the terms and conditions of the application. It's not rocket science. They use the number of times you apply as a predictor of your likelyhood to default on the debt. If you make stop letting lenders choosing their own lending criteria, the cost of the loans will go up for everyone to offset the risk.

PROLIANT

speedbird1973 wrote: »

But the credit providers want to now how many times you've applied for credit. You agree to this when you agree to the terms and conditions of the application. It's not rocket science. They use the number of times you apply as a predictor of your likelyhood to default on the debt. If you make stop letting lenders choosing their own lending criteria, the cost of the loans will go up for everyone to offset the risk.

This is not the case, if you accept the offer of credit a hard search will be left so if you continue making application the lender will know you have just commited to another line of credit. Simple.

RammytheRam

Here's an example of what shouldn't happen. I was looking at options to raise some cash part to pay off a credit card with 18% APR and some new money for a family event.
Being self employed I'm a bit restricted on lenders. Went to see Blackhorse for a £8k loan a couple of years ago.
Offered me a rate of 16.6% - 'advisor' said they could bring rate down if Joint application with wife. OK said me , what would be the rate in that case
12.8% says 'advisor' but I can probably get it down a bit more if you borrow £10K. OK I say - what would that rate be. Off he disappears again and comes back with 12.2%.
No thanks. I'll do it another way and off I went on my merry way.
Looked at my credit report a couple of weeks later and they had recorded 3 searches on my file.
These were purely quotations and the 'advisor' was aware of that. I had lots of correspondance with them and they refused to remove them.

Surely that is not an indication I was desperate!!!! but it did prevent me from looking elsewhere for a while.