Concerns have emerged in the market that some unnamed lenders have failed to switch to soft footprints which are less damaging to a client’s credit profile.
When shopping around for products the soft footprints will leave no mark on the client’s credit record and therefore can’t be seen by other individuals or organisations when they credit check the client. Hard footprints, however, will leave a mark on the credit record, giving the misleading impression of customers applying for more credit than they actually were.
Packagers who credit check clients on behalf of lenders and brokers have also been slow to switch to soft footprints.
Chris Cummings, director of the Association of Mortgage Intermediaries (AMI), said this issue had recently been raised with the trade body. He said: “Effectively, these hard footprints are killing the process of shopping around. Some lenders are not being as swift as they should be in switching to soft footprints.”
The FSA’s MCOB Handbook 5.5 sets out a variety of controls designed to ensure that credit reference agency searches and enquiries are only undertaken where they are appropriate.
The FSA has said when a firm decides to get a decision-in-principle for a consumer, and this involves a credit check, it expects the firm to act in a way that overcomes any difficulties that repeated credit reference searches might pose to consumers shopping around.
Matt Grayson, public relations manager at BM Solutions, said: “We use soft footprints in the most part. Consumers haven’t got a clue about the impact of hard footprints. It’s important the issue is raised.”
