Providers of motor finance are being urged to use a system of credit checks that does not impact upon potential customers’ rating by Startline Motor Finance.
The Glasgow-based lender cited an increasing tendency for ‘shopping around’ as the reason new technology was needed.
Paul Burgess, chief executive officer of Startline, stated that each time a credit check was performed by an agency it left a ‘footprint’ on customer files, which could lead to a reduced credit rating.
Burgess said: “Online tools provide customers with the means to shop around for credit and lots of people will spend time looking for the best deal, so multiple footprints are often left.
“The underlying assumption is that multiple credit checks on a customer’s file is a sign that they are often frequently rejected for credit or try to take out a lot of credit, both of which are understandably seen as undesirable.”
Burgess argued that with potential car buyers being increasingly mobile, and making use of the internet, this approach was no longer warranted.
Burgess added: “However, this is just not true in 2016…This is in no way a reflection of them as a credit risk. It is an area where the industry needs to change its model.”
Burgess announced that Startline had recently adopted Quotation Search, a technology which claims to allow credit files to be searched without impacting on credit ratings.