Equifax believes a continuing lack of credit data awareness could be stalling the first time buyer market - despite a 17% increase* in FTB mortgage products
According to new research*, the number of first-time buyer mortgage products has soared by 17% in the past month. There are now 312 products available for those with a 10% deposit – the highest number since November 2008, when the credit crunch first hit. And this is good news for first time buyers who, until recently, have had to source a deposit of 25% or more to get a good deal.
But leading instant online credit information provider, Equifax, is concerned that first time buyers could be missing out on these deals simply because they don’t understand the importance of their credit information.
Recent research** conducted by the company revealed that 1 in 3 consumers who applied for a credit card in the last year were refused credit because they had a poor credit rating. And Neil Munroe, External Affairs Director, Equifax is concerned the same fate could befall first time mortgage applicants, especially as a third of those who were declined their credit card application actually had no idea why they were turned down. He believes this highlights a continuing lack of understanding amongst consumers about the role credit information plays in their ability to access all forms of new credit, including mortgages.
“It’s vital first time buyers understand what information is used by mortgage providers to assess their creditworthiness, as well as how they can make sure their credit rating is at its best for them to get the most favourable deal. Something as simple as the fact that they are not registered on the electoral roll could hamper an individual’s ability to gain a good mortgage. Or it might be that a credit agreement they had forgotten about is showing as having an outstanding balance which could count against their credit score.
We recommend first time buyers check their credit report before they start applying for mortgages. And if their application is refused, they should stop applying and ask the lender why.
In our recent survey, over 50% of those who were refused a new credit card simply gave up applying – yet if they had checked their credit file they may have found they could do something to improve their chances in the future. The same could be too of first time buyers who are so crucial to stimulating the house buying market.”
To help consumers better understand the credit granting process, Equifax offers a comprehensive guide of what information does appear on and what information does not appear on the credit file for users of its credit report services.
What is ON Your Credit Report
• Electoral Roll Information - used to verify a person’s name and address and to establish the length of time you have lived at an address
• Credit Account Information – your accounts are classed as 'settled', 'active', 'defaulted', or 'delinquent'
• County Court Judgments or Decrees – held on your credit report for six years from the date of the judgment
• Searches - where a lender has performed a credit check on you will be kept on your credit report for 1 year
• Shared Financial Commitments – anyone you specifically share a financial responsibility with, such as a joint bank account
• Current Account – an overdraft balance is the only financial information you will see on your credit file
• Council of Mortgage Lenders Possessions - if you have voluntarily given up your home or had it repossessed
• CIFAS Protective Register - will only appear on your credit file if you have registered with the Protective Register. It aims to detect and prevent fraud
What is NOT on Your Credit Report
• Credit Accounts Opened Pre-94 - this information is currently not shared by lenders. It is under review by the government
• Student Loans – do not appear on your credit report but there are ongoing discussions on whether this will be supplied in the future
• Third Party Information - members of your family who live, or have lived with you do not appear as long as you don’t share any joint financial commitments
• Savings Accounts, Fines, Child Support Agency, Medical History, Criminal Records
Equifax recommends that anyone planning to make a new credit application obtains a copy of their credit file so that they can see exactly how their address is shown. This is how your credit history will be checked by lenders and if they believe the address is not properly presented, they can ask the credit reference agency to take this up with the lenders and the local authorities.
The Equifax Credit Report, with the facility to access credit information for the first 30 days free, is accessible simply by logging onto www.equifax.co.uk. Designed to help individuals understand their credit file and see what lenders see to assess new credit applications, the Equifax Credit Report also includes expert tips and advice to help consumers take the right steps to manage their finances and navigate through life's challenges.
If the customer does not cancel before the end of the 30 Day Free Trial, the service will continue at £6.99 per month, giving them unlimited online access to their credit information and weekly alerts on any changes to their credit file. It also includes an online dispute facility to help them correct any errors on their credit file simply and quickly.
* Moneysupermarket research, July 2011
** Survey conducted in November 2010 of 1532 Equifax members
For further press information please contact: Louise Fowler, Cecile Stearn, Tiffany Collins or Wendy Harrison at HSL on 020 8977 9132 / Fax: 020 8977 5200 or Email: email@example.com
Equifax is a global leader in consumer and commercial information solutions, providing businesses of all sizes and consumers with information they can trust. We organize and assimilate data on more than 500 million consumers and 81 million businesses worldwide, and use advanced analytics and proprietary technology to create and deliver customized insights that enrich both the performance of businesses and the lives of consumers.
Headquartered in Atlanta, Equifax operates in four continents and 15 countries, is a member of Standard & Poor’s (S&P) 500® Index. Its common stock is traded on the New York Stock Exchange under the symbol EFX. For more information, please visit equifax.com
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