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  • Mortgages & Finance

    Credit Agencies

    Hi PT,

    I've recently accessed three different credit reference agencies and to my disbelief, I received three different reports. Not just slightly different but way off, from the sublime to the ridiculous. There were no red flags, all loans completely up to date, no missed payments, electoral roll etc etc, in my mind a perfect scenario.

    However the reports varied from 'poor' to 'excellent'. My biggest gripe with this would be we have no idea what agency a particular lending institution is using when applying for finance. I can see in 'searches' what has been accessed but surely there should be some consistency.

    Anyone else come across this issue?

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    Hi Paul,

    This is something I have seen before. You can contact each of the agencies and ask them to update their system. The difference can be due to differences in the way your address is reported, but without seeing the reports I can't really comment. It can take anything from 9 days to 6 weeks to update depending on the report.

    Lenders now use 1 or a combination of 2 reports to check eligibility so these variations could affect you if you are looking for funding.

    The things you mention are checked, but I have also come across lower scores due to requesting a reduction in your credit card limit, using over 75% of the limit on a card, even a financial connection can impact your score.

    Happy to take a look if you would like some assistance on this?

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    Jenny Reeves

    Property Tribes Financial services

    You can contact me via Direct Message, or 07581 794922 or call the team on 01206 654444 for personalised quote and advice

    This has been an issue for many, many years.

    It would be great if there was consistency, however each credit reference agency is it's own commercial entity too and makes money from their own referral endeavours.

    Re your comment "My biggest gripe with this would be we have no idea what agency a particular lending institution is using when applying for finance" .. the best thing to do (yes, I know I would say this, wouldn't I? :-) ) is to use a Broker who knows which agencies are being used with each lender (as we do - although this can (and does) change every now and again), and by working with a professional Broker we can take away any such gripes, inconveniences and wasted time (which could happen if you approach a lender who will see a 'poor' report, whereas a different lender would be more aligned to the 'excellent' report and your case can progress more speedily.

    Hope that helps


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    FOR INDEPENDENT MORTGAGE AND INSURANCE ADVICE

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    Thank you for your reply.

    In relation to using a professional - all my BTL mortgages have been done using a Broker and (up to now without tempting fate) I've not had a problem raising finance. I just find it irritating that there can be such discrepancy between agencies. Time for regulation maybe?


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    Discrepancies and inconsistencies occur throughout the financial services world - so to allay and irritation, it would appear that your Broker is already on top of this.

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    FOR INDEPENDENT MORTGAGE AND INSURANCE ADVICE

    PROPERTY TRIBES FINANCIAL SERVICES

    http://www.propertytribesfinancialservices.com

    http://www.propertytribesfinancialservic...contact-us

    CONTACT US FOR LIFE INSURANCE QUOTES AND STRATEGIES.  PORTFOLIO MORTGAGES (VARYING TERMS) COVERED

    MULTI CREDIT REFERENCE AGENCY REPORT, IN ONE DOCUMENT HERE.

    http://www.propertytribesfinancialservi...statement/

    You have done the right thing in looking at the detail ensure that is correct and up to date.

    The headline "Credit Score" or "excellent/good" you would not expect to be the same between credit reference agencies. They all use their own calculations and come up with their own conclusions.

    The Headline Score/Rating is a dumb indicator, its for you to know if something has changed.

    When lenders query the reference agency, they don't pay much attention to the Headline Score/Rating they like you are looking in the details.

    I would certainly have a look at the one that says "poor" in more details".

    P.S. Your mortgage adviser will know which agency a lending institution uses. They typically use one at DIP and another on Application.

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    _________________________________________________________________________


    My posts are not financial advice but often me rambling - passing time on a coffee break.
    Our team at Bespoke Finance offers Limited Company Buy-to-Let and Cheap Life Insurance.

    _________________________________________________________________________


    Hi Paul,

    Unfortunately these differences in recorded information do happen and the official line is that the credit reference agencies can only report using the information they receive from all the lenders/utility companies etc. that send them information – and that is not 100% accurate (although it usually is quite accurate). 

    The scores that they post on an individual’s credit file are based on their own algorithms, the composition of which they never make public.  Significant factors will include whether or not you have history showing on the electoral roll and the percentage of outstanding balances on cards/loans compared to the available/maximum limits.   

    The good news in this is that those scores mean nothing to lenders (although they can be an indication as to the likelihood of approval) as lenders (mortgages in my case as part of a mortgage brokerage) ask their own questions to which they attach points for the answers and combine that with the actual data they get from the credit reference agencies. They don’t use the score from those agencies – just the data. 

    So if you have good payment history, not maxed out on cards with no CCJs/defaults/IVAs etc then you are likely to be approved for a mortgage – the amount they are prepared to lend will depend on that lender’s affordability calculation.

    I hope that helps a bit to understand at least,

    Cat

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    Call the PT Broker Hotline on 0333 363 6507 or email us at ptbrokers@johncharcol.co.uk