Tuesday, 18 February 2014

The wonders of consumer credit ratings

Most mornings I listen to SkyNews punctuated with advertisements which generally go in one ear and out the other. Then today the Experian Credit Expert advertisement caused me to think.

I've been paying a trivial monthly fee for years to Exeprian so that I can access my credit rating.

It all dated back to a problem with Santander whose Direct Debit system couldn't cope with the additional public holiday for Willy and Kate's Wedding. Santander said I had missed a payment on a loan even though I knew their system had failed to take the money out of the account. Customer focussed Santander, despite their assurances not to, and unknown to me, bizarrely gave me a 'black mark' on the Exeprian Credit Rating system.  Then, when I wanted to get a mobile phone from Vodafone I was embarrassed to learn they couldn't supply and I needed to pay a subscription to Experian to find out why. I therefore started the Experian subscription to establish how I had a 'black mark'. I established it was due to Santander's mistake, but had to contact Santander to get the 'black mark' removed.

So, Experian, accumulate information, regardless of how unjustified it is, and use that to give me a credit rating. Those who feed the information to Experian, no doubt pay for the service of also extracting information from Experian. I have to pay to access the information. And now, if today's advertisement is correct, Experian will now provide me with a service, to tell me how to reduce the credit rating they have given me. Isn't that one fantastic business model. Does the payment of the fee for the service de facto mean I'm paying Experian to get their information right?

Now, having said that, last week my son wanted to change his student accommodation. Apart from being asked to pay a holding deposit, which held nothing, he was also told that each of the guarantors would have to have a credit check carried out on them and the cost would be £66 per guarantor, paid for by the student (or in my case, me), of course my answer was: "hold on, a credit check doesn't cost £66", then I realised I already have a subscription to Experian, why can't I just hand the Letting Agent a copy of Experian's report. So, for all you parents out there going through the same con, a Letting Agent wants to charge £66 for a report, you can get for less than £2 per month, in fact you can probably cancel after the first three months trial.

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