A recent investigation by a leading UK newspaper has revealed that banks are failing to tell borrowers whether they can get the cheapest loan and credit card rates or even how much they could borrow without undergoing a credit check that can leave a damaging foot print on their credit file.
Credit Cards and Loans
When you see an attractive interest rate in an advert for a loan or credit card it does not mean that everyone gets that rate, banks run various checks including rigorous credit checks to determine which rate each applicant gets. However, as not everyone gets the best rates, sometimes higher rates than advertised are offered to applicants.
When this happens, applicants are left with one of two options.
To take the rate offered, or to look elsewhere.
When consumers choose to shop around is where the problem lies, once the applicant goes elsewhere the new bank; will follow the same procedure as the original bank and will see on the credit file that the applicant applied to the first bank, when there are multiple applications made to banks and other lenders for credit, banks often take a poor view of this.
Which means the applicant is likely to be offered another higher rate time and time again.
Currently the Office of Fair Trading (OFT) best practice rules state that banks and lenders should provide applicants with a quotation without damaging their credit record.
Clare Stott, Director at National Money says:
To make sure that you get the OFT best practice when asking a bank for a loan quote make sure you ask for a “quotation search”
