Treasury Committee launches inquiry into Credit Searches in conjunction with MSE
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I don't want governments and big business knowing my personal business, and neither should any of us.
When the people fear their government, there is tyranny; when the government fears the people, there is liberty. Thomas Jefferson
I was sent two copies of a lengthy agreement, one for me to keep and one to be returned asap to MBNA. I was disgusted that hidden in the depths of the small print was the APR, which was around 14% higher than I had applied for. I phoned MBNA to complain, they tried to pressure me to sign up and return it by stating that it ws still an excellent deal 'given my situation'
I never did sign it or return it. Instead I felt misled and suprised by the lack of clarity around the actual rate I had 'qualified' for. Had I have signed it and returned it, I would have already been committing myself to a substantial balance transfer at a rate that was worse than the current provider at the time.
MBNA felt vindicated as it was written in their terms and conditions that circumstances may not allow you to ge the rate. But it wasn't clear, or in plain english and worst of all, not clear from the application stage.
I have just applied for a loan with N/W as i have banked with them for 21 yrs. i explained what i needed loan for, I got a 'Soft Score' of there advertised rate 7.7%. However when they applied i got turned down, even the lady who was helping me could not understand why!
Regards
Jingles
When I was 29 I sold that flat and bought a house having never missed mortgage or loan payment.
When I was 31 I was made redundant and rather than let my unemployment insurance policies kick in I took a job for £12k a year less that I was previously earning (a big part in this decision was the fact that the PPI policy that I had taken out on a loan weeks before being made redundant advised that they wouldn't pay out). Subsequently I landed in arrears with my mortgage and the loan which amounted to 3-4 months at it's peak. This matter was also being made worse by spiraling bank charges at that time.
Here I am 5 years later (Mortgage arrears crucify you for 6 years remember!) and I am still being punished for a bad year. Currently my debt level (excluding mortgage) stands about the price of a family saloon. In an ideal world I would be able to get a loan to pay this all off and have one payment of about £250 / month (Instead of the £700 I am currently paying) but can I get a loan for that amount and not at a huge rate, can I heck. The vast majority of my debt is to the Bank Of Scotland who were actually a decent bank until the Halifax got involved with their "Computer Says No" approach to customer relations. I was "fortunate" enough to reclaim some of the afore mentioned bank charges from B.O.S. and since then their computer has said "Absolutely Not" as If I had actually robbed them with a swag bag and tights over my head.
In short, 5 years later and I cant get a loan from a bank where the majority of it is owned by me (The taxpayer) to pay off money that I already owe them which would leave me with over £400 a month to put back into an economy that has been brought to it's knee's by these bankers who think that I am a risk to them!!!!!!!
I'm sure there are rogues out there who do swindle loads of money from the banks but I am not one of them, and its about time that the government started to look at financial legislation with a view to protecting the working man from the banks as it all currently seems weighted in the banks favour.
And dont get me started on how much I have lost in the housing market!!!!!!!!
Although that’s an extreme case and there was an incompetent advisor to blame, the result would have been exactly the same had I ‘shopped around’ for 4 mortgages/loans/credit cards to get the best prices.
We are encouraged to shop around for the best price on insurance, utility’s, phones, food etc, and we can do this to our hearts content without any fear of it affecting anything in any negative way financially (quite the opposite actually), so why do banks and credit providers still have this power to practically destroy our ‘credit score’ for nothing more than trying to find the best deal?
The whole credit scoring world is shrouded in mystery and we are not allowed to know what each credit provider is looking for to get their ‘typical rate’, so the only way we can try to get it is to apply, and the fact that this then hinders you if you get offered a poor deal and want to try elsewhere is appalling and needs to be changed ASAP.
I have a number of other examples should anyone want them.
Regards,
DM
The scenario you paint above would not generate an auto decline - it is acceptable to have 6 searches in 6 months or 10 per year. If you're saying you were told because of 4 searches (wouldn't matter if they were done in a day or over 6 months, they count the same) that you were refused a mortgage then i'd have queried it - it is wrong!
Mortgages are also scored totally independent to variable credit thus this low amount of searches would have little, if any impact. To put it in perspective, I had around 80 searches when I last got my mortgage - admittedly it was a self cert and I paid 30% deposit but still, it wasn't even brought up (although it should have been, I had excrutiating circumstances in that I was the victim of ID theft!)....
Niddy - Over & Out :wave:
Thanks never-in-doubt that is interesting to know. The incident I was referring to was over 2 years ago so not sure if that makes a difference to the rules? Besides I was told it did effect my credit score and that I would be unlikely to get much as a result by a number of different providers, so made my decision on a mortgage based on that info (i.e. I went with one who'd already 'searched' my file, in effect reducing my choice to 4 providers rather than the whole of market). As it was people from sales departments who said this I took it as being correct in good faith, as they didn't want to even bother going through the process with me of trying to get me on board?
I don't know enough about it so trusted people who should on paper know more than me, so if anything it still shows how this subject can lead to people being easily confused and getting things wrong due to the lack of transparancy with the whole system. It may have been wrong, but I didn't know any better.
If what your saying applied at the time then I'm even more annoyed than I was then, as I'm stuck with a mortgage product that I knew wasn't the best at the time but was scared to try anyone else as I wanted to apply for some 0% credit cards and didn't want to make (what I was told was) a bad situation even worse. In the end I waited 6 months before appliying for anything and it looks like there may not have been a need for that either?
The point still stands that had I been shopping round for the best APR on a loan that I'd have been punished for doing that?!
No changes to 'rules' mate - they are not rules as such, they tend to call it 'industry standard' which is their version of saying 'old boys techniques'
So the processes were the same 5 years ago as they are today - its always the norm that 6 searches in 6 months is fine.
That is true had they done various searches but a MiP (mortgage in principle) should only be leaving an internal footprint i.e. unrecorded enquiry, meaning other lenders do not see it (only you do)! Its not like you could get 5 mortgages so they [STRIKE]do not[/STRIKE] should not be performing credit searches.
To learn about the types of searches have a read of my handy guide here: Credit Reference Agencies
I'd consider complaining to them using the basis of knowledge learned and the fact you feel you were mis-sold a product which may have offered them a more generous commission and as such you'd like to formally request the sale and retrospective processes are audited to establish authenticity within set guidance (to check they complied and did not mis-sell you the wrong product for financial gain!)....
You're right there - some lenders/agents are nightmares..... consider revenge - see advice above
What i'm saying is, unfortunately, true and did apply at the time as nothing has changed in that respect. Industry Standard/Practice (what nonsense) has been the same for many years, i.e. they do what they want and sod us - the consumer !!
Granted, accept this point and agree wholeheartedly.
Good Luck whatever you decide, feel free to PM or post away if you need specific advice or help..... :beer:
Niddy - Over & Out :wave: