Be Aware When Shopping Around For The Best Loans – when looking to take out a new personal loan, the standard behaviour from applicants is to search the market for the best deal possible.
Even though applicants are entering their details to request a quote, it is believed that because they are not going ahead with the loan it will not have an effect on their credit rating. Well, this may not actually be true. Even just requesting a loan quote may have an effect on someone’s credit rating.
TSB has confirmed that some loan providers on the market may make a ‘hard mark’ on a person’s credit file when requesting a loan quote. If you find yourself doing several quotes online and each one leaves a ‘hard mark’ on your credit file, then this will have a devastating effect on your potential of getting a loan or other credit in the future.
This is because when potential lenders look to provide a person with a loan, if there are several ‘hard marks’ on the credit file, it may be a sign to them that the person desperately needs a loan, cannot get a loan and may be a high risk to lend to.
As a result of this consumers are losing out on getting a loan, the best deal on the market or are paying over the odds, benefiting only the loan providers.
Make Sure There Is No Hard Credit Check Before You Apply
TSB believe that the best thing for loan providers is to make sure personal loan providers do not carry out hard credit checks on customers.
These should only be carried out if the customer decides to actually purchase the loan. Potential customers should not be punished for loan providers providing them with loan quotes.
Hard credit checks should not be carried out until the customer has been given their specific details of the loan and have decided to go ahead with the loan offer.
If the industry adopts this approach then it will stop consumers from being punished by loan providers for searching for the best deal on the market.
Until this happens, as a consumer you should make sure the lender is clear that you are only looking a quote so that it will only leave a soft harmless footprint on your credit rating.
This way you are able to still shop around for the best deal, without the fear of it damaging your credit rating for the future.