Are Credit Searches Unfair

speedbird1973

RammytheRam wrote: »

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.

A bit pointless in this case I agree!

However someone who makes lots of applications in a short space of time is statistically more likely to default on credit agreements.

In the case of car insurance am 18 year old male is more likely to crash the same car as a 55 year old lady. The correlation is more obviously in the insurance example, but there is a significant statisitcal correlation in the credit application too.

As an extreme example the other way there households that suffer with domestic violence are many hundreds of times more likely to be invovled in a house fire. There's no logical link between domestic violence and housefires however statistically one is a huge predictor of the other!

Large numbers of credit applications in a short space of time are a predictor of people being unable to meet their commitments. It's not a financial institution opinion, it's a statisitcally proven fact.