how often do lenders check existing customers credit files?

Harrysplan

Hi, 

I am awarre that lenders can check their existing customers credit files - for example. Very reduced my credit limit a couple of years ago when I took out a new card. 

how often to lenders do this and would this search show up as a soft search on credit report? For example, I am a long standing Barclaycard customer. Could Barlcaycard check my credit file without me being aware. or it showing on my credit report?

Brie

I don't know categorically whether they all check things or not. 

I do know that Barclaycard did a big exercise a few years back where they examined every card holders' account to decide whether the credit limit was supportable.  Some how they decided that I didn't "deserve" a limit in excess of £20k and reduced it to under £2k.  Given that my available credit was about 3 times my annual salary I'm thinking they were probably correct in what they did (not that I was abusing my credit but was doing a lot of BTs).    The only way they could have known this would be to look at my credit history.

Meanwhile my annual salary has dropped significantly but none of the other cards I hold have made any changes.  In fact some have offered my the chance to apply for a higher limit which might take me into the 4 time salary zone.  

Harrysplan

Brie said:

I don't know categorically whether they all check things or not. 

I do know that Barclaycard did a big exercise a few years back where they examined every card holders' account to decide whether the credit limit was supportable.  Some how they decided that I didn't "deserve" a limit in excess of £20k and reduced it to under £2k.  Given that my available credit was about 3 times my annual salary I'm thinking they were probably correct in what they did (not that I was abusing my credit but was doing a lot of BTs).    The only way they could have known this would be to look at my credit history.

Meanwhile my annual salary has dropped significantly but none of the other cards I hold have made any changes.  In fact some have offered my the chance to apply for a higher limit which might take me into the 4 time salary zone.  

Thanks for posting

So do you think that their searches would have to show on our credit files as soft searches, or do they get the information fed through in a different way?

400ixl

Barclaycard can make decisions based on the spend analysis they have on you without the need to go to any 3rd party.

Ultimately they only have an ability (they have limits they have to comply with) to lend so much, so they do regular internal analysis to decide if their current exposure is correct and make changes to rebalance and comply.

You will not likely see any checks with reference agencies.

CliveOfIndia

Harrysplan said:

So do you think that their searches would have to show on our credit files as soft searches,

Even if they do perform a soft search, remember that only you can see them - soft searches are not visible to other lenders, so they have no impact on your "credit worthiness", if that's what you want to call it.

Nasqueron

Brie said:

I don't know categorically whether they all check things or not. 

I do know that Barclaycard did a big exercise a few years back where they examined every card holders' account to decide whether the credit limit was supportable.  Some how they decided that I didn't "deserve" a limit in excess of £20k and reduced it to under £2k.  Given that my available credit was about 3 times my annual salary I'm thinking they were probably correct in what they did (not that I was abusing my credit but was doing a lot of BTs).    The only way they could have known this would be to look at my credit history.

Meanwhile my annual salary has dropped significantly but none of the other cards I hold have made any changes.  In fact some have offered my the chance to apply for a higher limit which might take me into the 4 time salary zone.  

It is worth noting that the terms of your card account will sometimes require you to inform them of changes of circumstances such as a loss of income and it would technically be a breach of the card Ts & Cs to not do so, it depends on the card

Brokenknee

Yes. Some lenders will run a monthly batch process against either their full customer book or subset of it. The returned information is then used to assess the overall risk in their customer base, and obviously identify customers specifically for increase/decrease in credit limits for example. 

mjm3346

If you clear your balance in full every month checks are probably less likely than if your level of debt is increasing  

Harrysplan

Brokenknee said:

Yes. Some lenders will run a monthly batch process against either their full customer book or subset of it. The returned information is then used to assess the overall risk in their customer base, and obviously identify customers specifically for increase/decrease in credit limits for example. 

Thanks - so would these checks have to be visible on the customers report as soft searches, or can these checks be done without it being logged?

CliveOfIndia

Harrysplan said:

Brokenknee said:

Yes. Some lenders will run a monthly batch process against either their full customer book or subset of it. The returned information is then used to assess the overall risk in their customer base, and obviously identify customers specifically for increase/decrease in credit limits for example. 

Thanks - so would these checks have to be visible on the customers report as soft searches, or can these checks be done without it being logged?

If they're just reviewing the data they hold internally on you as a customer, then you won't know about it.  If they take a look at your credit file, it'll be logged as a soft search.

But since a soft search is only visible to you, as previously mentioned, it really doesn't matter at all.  It is not visible to anyone else, and has no impact whatsoever on your credit status.