The demands come after the Financial Services Authority (FSA) confirmed it is to review its criteria on credit checks and footprinting.
Hugh Nicholls, partner at Bradbury Berkeley Financial Services, said the industry must work to develop a system that helps brokers get the information they need to complete mortgage searches and applications without damaging consumers’ credit ratings.
He said: “Brokers cannot get credit searches on clients without breaking the Data Protection Act or sending them away to do it themselves – which can take weeks. This is a problem, as we do not know if the client has a clean credit rating or not. Often, a client may not know certain details, such as if they missed a payment or the exact amount they have on their credit card and as a result, the information we are given is not precise. This may lead to a case being declined or cascaded for reasons unknown to the broker.”
The problem, Nicholls added, is that in many cases this could lead to a footprint on the client’s credit record. He stressed that while Trigold offers a paid-for credit search that can be used by brokers with their clients, the industry needed a facility that allowed searches to be made without harming credit records.
Demands for changes to the way in which credit searches are carried out had also been made by credit agency, Equifax. Neil Munroe, external affairs director at Equifax, said: “It is becoming standard for consumers to shop around for the best deal. However, there are a number of key points consumers need to take into account. When a person is just making a credit enquiry, they need to make sure it is logged as a ‘quotation search’. This means it will clearly show up as a quotation search and not a credit search on their report. Lenders will ignore this when assessing the credit rating.”
