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Equifax warns consumers about credit searches as the need for new credit increases

www.equifax.co.uk

London, 27th November 2008 - - As consumers face the end of fixed term mortgage deals or are simply looking for new credit to fund Christmas spending, they need to be aware that too many applications could add up to credit refusal. This is the warning from leading credit information expert, Equifax as External Affairs Director, Neil Munroe, explains:

"As many people know, when they apply for credit the lender will do a credit check to make sure they are not taking on too much debt and this will be recorded on the individual's credit file as a 'search'. However, what some people may not realise is that even just enquiries about rates, including those using money comparison websites, could end up as hard searches on their credit file. And if too many searches are logged in a short amount of time this could actually have the opposite effect, with them being refused credit.

"Lenders look at the number of searches on an individual's credit file and if there are a considerable number in a short space of time this rings warning bells that either the individual could be taking on too much credit, or their identity is being used by fraudsters. It's crucial, therefore, that consumers seeking new credit deals - whether it be a new mortgage, a credit card, car insurance on instalments, even a new mobile phone agreement - understand what sort of search will be done by the lender and how this might impact their ability to get credit in the future.

"If it's just a case of shopping around to get the best deal, then you should ensure that the lender logs the enquiry as a 'quotation' (soft) search, rather than an 'application' (hard) search. This way you can maintain your credit rating. 'Soft' searches are not taken into account by lenders when they are assessing an individual's credit rating."

Equifax also advises consumers to obtain a copy of their credit report, both before they start shopping around for mortgages and after they have completed the process. This will enable them to check that the information held on them is up-to-date and that their credit rating is looking as good as possible for future credit applications. If an individual's application is declined they should ask the lender why. If the lender says it's because of information supplied by a credit reference agency, they should stop applying for further credit and check their credit file for any adverse information that may be affecting their ability to gain credit.

"We are very happy to help any consumers who feel that searches on their credit file have been logged incorrectly", continued Neil Munroe. "We can take this up with the lender on the consumer's behalf."

Munroe concludes, "Many consumers could be facing a hefty increase in their mortgage payments, as they come out of fixed rate deals, so will be keen to find a better deal. Plus it is hoped that the Government's pressure on lenders will see an easing of stringent lending criteria with improved access to new credit for those who can afford it. This means there will probably be more shopping around for the best offer.

"But with lenders still very cautious about repayment of future debts, it's important not to do anything that might have a detrimental affect on your credit score. So consumers should make sure enquiries - rather than full blown applications - are logged as 'soft' searches to protect their overall credit rating."

ENDS

For further press information please contact: Elinor Puzey, Louise Fowler, Cecile Stearn or Wendy Harrison at HSL on 020 8977 9132 / Fax: 020 8977 5200 or Email: elinor@harrisonsadler.com