Equifax is advising consumers if they are shopping around for credit, they should ask lenders to log the search as a ‘quotation search’ and not a ‘credit search’. This is to ensure enquiries do not have a negative impact on a person’s credit rating. In addition, with such an array of credit offers in the marketplace, it is important that consumers ask themselves the right questions before they make a decision on a credit agreement.
Neil Munroe, external affairs director at Equifax, said, “It is becoming standard practice for consumers to shop around for the best credit deal on the market. 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 credit report. Other lenders will then not take it into account when they look at this data to assess your credit rating.
“In addition, by considering the answers to some key questions, people can make a more informed decision on what credit deal best suits them. Credit is a major purchase on its own – and a wrong decision can lead to long term grief.”
Key questions consumers should ask:
- How much will the credit cost you compared with other similar deals?
- Is your home being used as security?
- Is it the best deal and interest rate you can get?
- Do you fully understand the credit agreement form you are about to sign?
- Will the interest rate stay the same?
- Are there extra charges if you repay the debt early?
- What happens if you miss a payment?
- What do you have to pay each month and for how long?
- What's the total amount that you will pay back?
- Can you take the credit agreement away to consider at your leisure?
Munroe commented: “We advise consumers who are going to shop around for credit to obtain a copy of their credit report before and after. This will ensure the information held on them is up to date, plus they will be able to review how lenders have logged a ‘quotation search’ and if need be arrange with them to have it reclassified.”
