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  1. #1
    Join Date
    Aug 2013
    Posts
    1,509

    Default Credit checks warning

    No doubt many here will already know this but for those who aren't aware...

    Banks and lenders love doing credit checks, obviously, and often not even for lending. I have had 3 recent checks done - 2 for business merchant services and 1 to open a transaction account with CoOp (Just to have a look - I don't think I will switch). By my reckoning this has cost about 24 points as it appears to cost 8 points each.

    Now I am enquiring about finance. Some lenders like NZCU want to do a credit check before they can even quote me a rate. So far only the mortgage broker has accepted a copy of a very recent check I obtained from the bank at the time of the merchant services application, but even he has indicated he may need to do one at some point. Every other lender wants to do their own to even look at an application.

    Each credit check comes with a cost and some/most lenders have credit score as a criteria.

    I'm seeing my credit score (which was described by 2 banks as "very good") go down and I haven't borrowed a damn dime.

  2. #2
    Join Date
    Apr 2016
    Posts
    2,343

    Default

    Every time your credit is checked that is recorded against your file and it actually reduces your credit score.

  3. #3
    Join Date
    May 2008
    Location
    Auckland
    Posts
    49

    Default

    Does that apply to when you do the free check as well?

  4. #4
    Join Date
    Aug 2013
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    1,509

    Default

    Quote Originally Posted by fredt View Post
    Does that apply to when you do the free check as well?
    I don't think so because that doesn't show on the report.

    On that topic - Don't request a free report through the online form. Instead write to them quoting the Privacy Act 1993. Include your full name, present address, previous address and date of birth (note: see s.45 of the Act)

    They will almost certainly write back trying to push you into the online form. This is intentional on their part to try and shape the scope of the request. At this point you will have to ram it home and quote Principle 6 (does not state a form in which application must be made) and s.30 (They can't refuse except as allowed) of the Act to them.

    I have personally tested this at the Privacy Commissioner who upheld a request does not have to be on a specific form and can even be made verbally.

    A bit of blah blah will go back and forth as they try every trick in the book to throw you off course. I've done this a few times before (and prevailed every time) so it didn't deter me.

    Eventually they will hand it over (that was my experience) - because they have no other choice - possibly along with other insightful stuff which you wouldn't otherwise have got.

    The next step is to check everything which shows on there and argue it if necessary. This includes the codes with each credit check. They are intentionally vague but you can call them up and ask them what they mean... RM is residential mortgage, CF is consumer finance, OD is overdraft, LP is lending product (can be a credit card) and CC is credit card. The reason for this is these are sometimes - probably often - miscategorised.

    If a bank (etc) did a credit check for a non lending product (transaction account for example) and used "CF" or any code other then "savings account" (for example) get it changed. I am not sure what the short code is for savings account but I should know soon. I am not sure if this will alter the credit score but I have confirmed lending managers do look at what the check was for.

    Everything I have heard is the less lending/credit applications the better. The fewer checks the better.
    Last edited by PTWhatAGreatForum; 29-04-2016 at 08:56 PM.

  5. #5
    Join Date
    May 2008
    Location
    Auckland
    Posts
    49

    Default

    Quote Originally Posted by MichaelNZ View Post
    On that topic - Don't request a free report through the online form. Instead write to them quoting the Privacy Act 1993. Include your full name, present address, previous address and date of birth (note: see s.45 of the Act)
    May I ask why?

  6. #6
    Join Date
    Aug 2013
    Posts
    1,509

    Default

    Quote Originally Posted by fredt View Post
    May I ask why?
    Why what specifically? I thought I had answered the "why" here:

    Quote Originally Posted by MichaelNZ View Post
    Eventually they will hand it over (that was my experience) - because they have no other choice - possibly along with other insightful stuff which you wouldn't otherwise have got.
    (emphasis added)

  7. #7

    Default

    If you can get finance why would you invest your time to do this? If you can't what difference will a few point be to your application?

    Your tips might be handy if you're in a position where credit is rejected but how bad does your score need to be to be worrying about 24 pts on your credit score?

  8. #8
    Join Date
    Aug 2013
    Posts
    1,509

    Default

    Quote Originally Posted by Don't believe the Hype View Post
    Your tips might be handy if you're in a position where credit is rejected but how bad does your score need to be to be worrying about 24 pts on your credit score?
    You don't understand, obviously. It's not about good/bad because these are assessed by lenders in bands. If you are in the top tier band, why would you take the risk of going down?

  9. #9
    Join Date
    May 2008
    Location
    Auckland
    Posts
    49

    Default

    Quote Originally Posted by MichaelNZ View Post
    Why what specifically? I thought I had answered the "why" here:

    (emphasis added)
    Ah was quite hidden amongst your overall message. Thanks!

  10. #10
    Join Date
    Sep 2004
    Location
    Hastings
    Posts
    14,770

    Default

    One amusing anecdote I heard from another forumite who was also in a business that made credit checks was that if your name does not appear in the results, they panic, because you have no history. (My in-her-eighties mother ran into a similar problem: the penalty for paying as she went.) Hell, you may even be using a false name.
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