Online motor finance providers have been warned not to damage their customers’ credit scores by leaving a credit application search - usually called a ‘hard search’ - on their credit record.
The issue relates to two types of credit checks. ‘Soft’ or quotation searches, are designed for when customers were shopping around for credit, but ‘hard’ or credit application searches are intended to show that a formal application had been made.
Tew blamed some motor finance provider systems for not effectively distinguishing between the two.
He said: “Soft searches have no effect on your credit record, but hard searches often do because, if you have numerous records and no proceeding credit agreement, lenders often assume you have been identified as a bad risk.
“Today, when customers expect to be able to shop around and make all kinds of applications and checks online while they identify the deal that is best for them, they are sometimes inadvertently damaging their credit record.
“The act of applying for motor finance should not make it more difficult and probably expensive to get motor finance in the future, unless there is good evidence that the applicant is a poor risk.”
James said that iVendi systems were designed to ensure used car buyers could check their finance eligibility as often as they liked with no impact on their credit score.
iVendi has been providing e-commerce solutions since 2009 and has products connected to more than 7,000 dealer locations in the UK.
