Credit Scores Explained
By Charles michael Challiner
Research has recently suggested that consumers who apply for loans and other forms of too often through comparison websites may risk damaging their rating.
It is estimated that 8.7 million people have bought financial products such as loans, cards and insurance through using comparison websites over the past year.
However, research shows that the sites could be leading consumers to adversely affect their rating as many of the comparison, or aggregator, sites concentrate on price rather than quality of service or suitability of a product.
As a result, consumers are drawn in to applying for unsuitable products and are therefore continuously rejected.
Although rejections are not held on a person's record, applications for do show up as footprints
Consumer affairs manager at rating company Experian, said: "All the applications you have made for over the past 12 months will show up on your report.
"When a lender carries out a check they will see those applications and if there are a large number of them it may make them think that you are desperate for credit, or it may even look as though someone has been fraudulently trying to apply for in your name," he said.
The financial comparison site that commission the report, MoneyExpert.com, states on their website that 2.8 million people have made applications for 3.5 million financial products over the past year. Around 6 per cent of people have been rejected when applying for cards, mortgages and loans.
MoneyExpert.com has launched a profiling service that allows consumers to tailor their search so that only those providers whose lending criteria suits their rating appear on the list.
The profile is based on the consumer's answers to questions about their history and no footprint is left on the consumer's record.
Professionals in the financial industry are now calling on all comparison sites to offer a similar service. Customers must also be warned about the potential damage to rating that could be done by making too many applications.
Website’s should also improve their offer to consumers by being more transparent on fees and charges imposed by providers. They also need to broaden the focus of sites to include service and features other than price.
No one has an automatic right to credit, but if you are refused on the basis of your rating you can tackle the problem.
If the decision to refuse you was made by a computerised scoring system, you have the right to ask the lender to review the decision.
Most High Street lenders will make a decision on whether or not to grant you on the basis of information supplied by the UK’s two leading reference agencies - Experian and Equifax.
These two firms compile histories from a host of different sources such as:
·Data held by the agencies
·Electoral register
·County Court judgments
·Bankruptcy and administration orders
·Credit payment history
·House repossessions
Your record will be highlighted if you have had a large number of checks carried out. Everything from buying a freezer on an interest-free deal to opening a new card will leave an electronic footprint on your history.
However, the decision to refuse will be made by the lenders, based on their own criteria, but if you are refused you could check your history to make sure no mistakes have been made.
Within 28 days of your last contact about a deal, ask the lender for the name and address of the agency which provided the information. You can then write to the agency yourself and ask to see your information on their files.
To do this you will need to send a £2 fee, give your full name, address and postcode, as well as the details of your addresses over the past six years.
If you are a sole trader or partnership, give your business name and address in case your information is held under those
details. The agency must then reply within seven days.
If you find the decision to refuse your was unjustified or wrong, and there is further relevant information which may change the lender's mind, you can ask the lender how to go about having the decision reviewed.
You can ask for your history to be changed if it is incorrect or includes details about people with whom you no longer have financial connections with.
You can also have notes attached to explain certain periods in your history. However, you can't get information removed just because you might find it embarrassing.
Most national newspapers advertise companies claiming they will repair your rating. However, these firms offer will charge a high fee.
You have the right to ask companies in writing, at any time, for a copy of your file. The Information Commissioner can provide consumer guidance leaflets with further advice.
Article Source: http://www.articles-galore.com
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