Lending companies and your information

It is usually the case that lending companies tend to make wider use of your information than brokers do. As this is the case, alongside any lender documents you should receive a statement from the lenders informing you of their plans with what to do with your information. The statement is commonly found near any signature box, or clearly placed on the front page. If the information is not to be found then there may be an 'information padlock' sign drawing your attention to where the details could be found. If no letter containing a statement is received then at least they should tell you where to look to find out what use they wish to make of your information.

Lending companies will use the information obtained from the credit reference search to help them assess the application and its suitability, they may even use the result of any search in a credit scoring system. For those of you who don't know, a credit scoring system is a system by which points are given for many different factors, such as age, line of work, your records on how you have repaid precious or existing credit etc. Different lenders use different methods of scoring. It all depends on the individual's idea of importance and the level of risk they are willing to accept.

You should always be told if a lender is going to use a credit scoring system.

Your details will also be checked with the credit reference agency to satisfy the lenders agenda that all details on an application form are true. If lenders suspect information to be false or inaccurate, it may be reported to a fraud prevention agency. Reports from CIFAS relating to fraud and fraud avoidance are available to most lenders. They have details indicating that fraud or attempted fraud has been notified. They contain information, which may not directly relate to you, it might relate to some one who has tried to impersonate you.