Callcredit Launches Free Credit Reports Service in the UK - Not a Free Trial in Sight!
According to a recent survey by credit reference agency, Callcredit, people living in the UK have spent over £22 million on monthly free credit report online services. Callcredit survey results include:
- 27% said they were attracted to these deals as they believed they were free, only to find their bank is debited every month.
- 73% believe that if credit reports are marketed as free they should be just that, with no monthly payments.
- 22% surveyed stated on average over four months subscription they only looked at their credit report once.
According to Google Search Tools, in May, in the UK there were more than 265,000 searches containing ‘credit reports’.
What is interesting is Callcredit with the launch of Noddle, is seeking to take the high road over competitors such as Experian’s Credit Expert and Equifax. Yet Callcredit had been marketing their consumer credit report service as ‘free’, as the screenshot of their website clearly shows from march, 2011. So this indicates a strategic change of direction, possibly based on their small share of the consumer credit reports market, so this is just another way to make money from the commission, from successful credit applications, made through the website.
Screenshot – 28th December, 2010.
Screenshot – 28th June 2011.
Credit Reference Agencies in the UK
In the UK there are three credit reference agencies, the biggest is Experian, then Equifax and then Callcredit, which is the smallest. The credit reference agencies compile data on consumer credit history, which lenders use along with other data such as application details, for lending decisions.
Pay Monthly Credit Report Services
The key point from this, is that lenders are more likely to use Experian or Equifax credit file data when making a decision to lend to a consumer, so the consumer still needs to ensure the data held by these credit reference agencies is correct.
From the Noddle website it mentions access to your credit report and credit rating, but it is not clear whether this service will be equivalent to the pay monthly services available from Experian’s Credit Expert, Equifax and Callcredit themselves.
For example the pay monthly services include access to customer support centres, to answer queries that subscribers have about their credit report, and advice about how to improve their individual credit report. The pay monthly services also include alerts as to changes on your credit report, which is a key early warning for identity theft (leading to identity fraud), which is a massive growing concern. Consumers have a legal right to statutory credit report from all credit reference agencies for £2, which are now available on-line.
Understanding Your Credit Report and How Lenders make Decisions on You
Also it is all very well, having access to your credit report, and credit rating, but for example if your credit rating is low, consumers needs to understand how to improve this, not just be prompted to apply for a bad credit credit card with high APR’s.
Consumers need to understand a credit rating from a credit reference agency on your credit report. It is possible to have a top end credit rating from Experian, Equifax and Callcredit, and still be turned down for a credit product. A credit score from a credit reference agency is like a health check of your credit report.
In the current strict lending environment, it is important to understand that, when you apply for a product, the lender, allocates a unique credit rating or score to you. So you could be turned down even if you have an impeccable credit score, because your salary is too low, your address cannot be verified, you pay off your balance in full every month for a credit card, which means the lender will make little money from you.
In conclusion it is not as simple as some of these sites may indicate, individuals need to understand their credit history, make sure it is correct for example your application address, matches your electoral roll registered address. Speak to a prospective lender, about their criteria for a product, to see if there is a fit based on more than just your credit report content. They can do quotation searches or credit checks, which do not leave a permanent footprint on your credit file. Credit application rejections do not help your credit file, look favourable to other lenders.
When applying for a mortgage, or a key financial product, it is worth doing your homework.