Julian Knight: Penalised for checking your credit? That's not fair
Sunday 13 September 2009
I have always found it an injustice that those who look to shop around for a loan, credit card or mortgage actually risk damaging their credit rating in the process. It goes like this – each time a potential lender checks out your credit file it leaves a trace. If the consumer is turned down – for whatever reason – the trace turns into a great big muddy mark and, in these straitened lending times, this can be enough to bar the individual from accessing credit elsewhere.
The idea of the present system is that lenders are able to see if someone is trying to access lots of different lines of credit – a potential sign of financial distress – but in the blunt-weapon world of the credit score it hits those who are simply exercising their consumer choice and seeing what's what.
Over the past few weeks, Barclaycard has been quietly running a pre-application checking process, where customers can see if they can get credit or not without a rejection damaging their credit score. In short, customers no longer have to fear the impact on their ratings of lenders' often arbitrary decisions. (And did you know that, last year, some brokers were telling customers to get their mortgage application in at the start of the month because it is more likely to be accepted than those at the end of the month? Then, there is generally less money to lend out and, as a result, criteria are tightened so only people with pristine credit ratings get the deal.)
All in all, Barclays is to be applauded for its move, and let's hope that other lenders follow suit and we can end the injustice of potential borrowers having their credit scores beggared – just because they have asked the question.
Budget-flight operators have long been accused of scamming the public over pricing. You know the drill, rock bottom fares get multiplied if you want to take a bag on board, check in at the airport or pay with anything other than the most obscure of debit-card types. But at least you have the option of going hand-luggage only and of booking online or getting your hands on the no-fee card. In short, ultra-low fares can be had if you're willing to work for them.
But for many people going to sporting, music, theatrical or comedy events, the price on the ticket is only the start. For example, a colleague of mine has just bought two tickets for the, in my opinion, serially unfunny Michael McIntyre show at the O2. As well as £30 per ticket that goes to the artist, the agency charges a £4.25 per ticket administration fee (what for?); £2 postage (are they going to deliver it on a silver salver?); and then, bizarrely, £5.26 "missed event insurance" in case he is ill, is called up for jury service, or takes the final bad career move of dying. This cover is a US innovation and, like most financial products from the States, it's a load of marketing rubbish ("third way" annuities anyone?). Anyway, the total for my colleague's two tickets, instead of being £60, came out at £75.
And there are worse examples. Useless insurance can be cancelled and tickets collected at venues, but the whole admin-fee deal for anything from cinema tickets to music festivals is totally unacceptable. Buy anything else and admin is included. Anyway, shouldn't promoters and cinema firms be happier with people booking early? It means they get a steady income and they don't have to employ as many staff on the door. If easyJet or Ryanair pulled the same stunts they would have the Advertising Standards Authority down on them. It's time the whole administration-fee ploy was investigated.
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