Searches - What's the problem?

Hazzinho

a4a wrote: »

What if I decided that I would take a day off work, sit down at my PC and look to change:

-My mobile phone provider
-My broadband provider
-My Sky to Virgin
-My credit card to 0%
-Maybe take a loan at a lower rate than my other credit card to reduce my monthly payments and
-Change my car finance for the same reason.

So as to reduce all my monthly outgoings whilst not increasing any indebtedness.

Why shouldn't i be looked on by lenders as being sensible and responsible rather than desperate ?

You wouldn't be credit checked for all of these and it's highly unlikely your do that. I can give an example the other way. What if I applied for a loan for £10k with 10 lenders online and they ignored the searches for credit and I get £100k of credit? We are in an age where lenders are extra cautious.

I still think you are overly concerned, just get quotes no credit check are required. That's me done on this, like I say we need real time reporting.

MisterBaxter

a4a wrote: »

I agree with almost all of what you say and this is in principle how it works but I don''t think its right.

.........Because we live a world with so much choice and so many people vying for our business, its possible (and in my case very likely), that I want to change deals on a regular basis to reduce my monthly outgoings but everytime I do, I am penalised because someone has to do a credit check on me and this apparently makes me look desperate!.......

I agree that having multiple searches across different types of product in an ideal world shouldn't be seen as high risk or desperation. Providing there are no defaults on your file prior to switching why should it be a problem applying for a new phone contract at the same time as changing broadband, changing utility company and perhaps getting a single credit card but perhaps not so with applying for multiple lines of revolving credit or loans.

a4a

Hazzinho wrote: »

You wouldn't be credit checked for all of these and it's highly unlikely your do that. I can give an example the other way. What if I applied for a loan for £10k with 10 lenders online and they ignored the searches for credit and I get £100k of credit? We are in an age where lenders are extra cautious.

I still think you are overly concerned, just get quotes no credit check are required. That's me done on this, like I say we need real time reporting.

I'm totally with you on realtime reporting, this would help solve many of these issues. I've written to the CEO of experian about this and his (or some clerk's) response was its "the volume of information", that is a problem. What a load of poppycock. In this day and age computers can deal with billions of bits of information in mili-seconds.

They don't want to do it because nobody is putting them under pressure.

Hazzinho

a4a wrote: »

I'm totally with you on realtime reporting, this would help solve many of these issues. I've written to the CEO of experian about this and his (or some clerk's) response was its "the volume of information", that is a problem. What a load of poppycock. In this day and age computers can deal with billions of bits of information in mili-seconds.

They don't want to do it because nobody is putting them under pressure.

Looks like it might be sooner than we thought, good old Google - http://www.callcredit.co.uk/press-office/news/2014/01/callcredit-information-group-leads-the-way-with-real-time-data-sharing

a4a

Hazzinho wrote: »

Looks like it might be sooner than we thought, good old Google - http://www.callcredit.co.uk/press-office/news/2014/01/callcredit-information-group-leads-the-way-with-real-time-data-sharing

Excellent.

What do they mean by 'Alternative Lending Sector' though, and are they saying that they are only providing realtime information to lenders and not consumers?

MisterBaxter

a4a wrote: »

Excellent.

What do they mean by 'Alternative Lending Sector' though, and are they saying that they are only providing realtime information to lenders and not consumers?

Alternative Lending Sector, Sounds like 'Payday' lenders.

Realitime information to consumers = subscription service at increased monthly fee?

a4a

Yes, and peer to peer lending from what I can see, so unfortunately I don't think this announcement is what we think it is :-(

If realtime information does come in, I'm sure as you say, we will have to pay increased monthly fees!

a4a

Also, looking through CallCredits business pages, I notice that they offer businesses i.e. lenders a service whereby they can quickly and easily see a consumers credit score, as defined by callcredit, 'a snapshot of their file and credit worthiness'. Its called 'Gauge'.

This is actually a service offered to lenders by callcredit and fits in with what I've been told by someone who used to work at a lenders as a way that some lenders do a 'soft search', to see how CRA's view them.

Therefore, contrary to what some people think, these CRA credit scores do mean something to lenders and not meaningless as I suspected.

http://www.callcredit.co.uk/press-office/news/2008/06/gauge-the-risk-callcredit-is-the-first-to-launch-dynamic-bureau-scores

Taken from site:
"Gauge has been developed exclusively for Callcredit by DecisionMetrics and provides lenders with a fast, objective and consistent measurement of the credit risk associated with their customers"

MisterBaxter

a4a wrote: »

Also, looking through CallCredits business pages, I notice that they offer businesses i.e. lenders a service whereby they can quickly and easily see a consumers credit score, as defined by callcredit, 'a snapshot of their file and credit worthiness'. Its called 'Gauge'.

This is actually a service offered to lenders by callcredit and fits in with what I've been told by someone who used to work at a lenders as a way that some lenders do a 'soft search', to see how CRA's view them.

Therefore, contrary to what some people think, these CRA credit scores do mean something to lenders and not meaningless as I suspected.

http://www.callcredit.co.uk/press-office/news/2008/06/gauge-the-risk-callcredit-is-the-first-to-launch-dynamic-bureau-scores

Taken from site:
"Gauge has been developed exclusively for Callcredit by DecisionMetrics and provides lenders with a fast, objective and consistent measurement of the credit risk associated with their customers"

I'll bet they don't say how many lenders actually use it though. When combined with salary information it is probably OK for a quotation search but not much else. When you look at the 'who uses who' list CallCredit doesn't seem to be used by many lenders at all, the only searches that ever appear on my report are for insurance quotes, so CallCredit are probably cheap for basic searches. It is also common to see posts on the forum from people saying my credit score is excellent with the agencies but I still can't get a credit card or a loan which reinforces the fact that the score that the CRA sell to the consumer aren't being directly used in lenders decision making. A lot of what the agencies say about how your credit score affects you is advertising blurb to get a subscription fee out of you because they don't make anything from the £2 stat report fee.

If scores were used in the same way as they are in the USA it would make life easier for consumers, lenders could say in their advertising don't bother applying unless you have a score of at least XXX, this seems to be the way the FiCO system works but even then there are multiple versions of the scoring system.

Nebulous2

To look at this from a slightly different angle. First of all I am sure that lenders will have data on the risk of people with multiple searches defaulting. Even though the numbers are still very small, with most of the people in both camps being 'good' customers the bank will load products based on increased risk. An increase in defaults from 1% of people to 3% would be hugely significant in terms of a bank's profits.

On to my main point though. From a personal viewpoint, I'm quite happy for people with multiple searches to have loadings. With personal loans rates and advertised deals on credit cards having to be offered to 51% of people, this helps keep me in the group that is always offered prime deals.

So, if a bank prefers me, with very few credit searches, to a hyperactive credit searcher then that works for me.