Skip to main content

Can insurance comparisons put a dent in your credit file?

7 shares 5

View comments

Enlarge   Dented: Can doing a car insurance comparison harm your credit file? One This is Money reader found searches despite not applying for credit.

Shopping around for the best value insurance quote on comparison websites has become common practice for millions of people looking to save money on their bills.

But what some people who use comparison websites don’t know is that insurers who are carrying out quote searches could end up leaving a footprint on their credit records.

One This is Money reader contacted us via e-mail saying they had used comparison website confused.com to carry out a car insurance quote search in April 2012.

He turned to the website after the renewal quote he received was higher than expected. He eventually decided to take out a policy from Admiral and paid for full cover without any credit facility required - another happy comparison website user.

However, a couple of months later he checked his credit report to find a number of insurance companies performing credit searches on him in a short burst of time, leaving what appears to be a footprint on his file.

He is now worried that other lenders in the future may believe he has been applying for credit, when he hasn’t. So should he be worried?

  More... How to get the cheapest car insurance: Ten tips for cheaper car cover Buying insurance through a broker can push up your premiums by £500 a year

A spokesman from credit report company Experian, said: ‘Some insurers are able to access credit data for the purpose of assessing an individual’s ability to meet a premium installment payment plan, typically spreading an annual insurance premium value over 12 monthly payments.

‘When credit data is accessed at the time of quotation, a “soft” footprint is left on the individual’s credit file which is visible only to the individual, should they request a copy of their own credit file.

‘A “soft” search footprint is not visible to any other individual or organisation and has no effect on the individual’s credit history/rating. 

‘If the individual accepts an insurance quotation and enters into an insurance premium payment plan, a “hard” footprint is left on the individual’s credit file in the same way as any other credit payment plan agreement.’

Car insurance: Insurers may perform credit checks on you - although for car insurance that doesn't require credit, it should just be a 'soft' footprint

So even though these searches are visible to the customer who obtains the credit report, they shouldn’t be visible to companies who may need to do a credit check.

However, it all depends on the type of search that is performed on the file - there are different types of search which appear on credit reports.

Only one type does affect your credit rating directly - simply labelled a ‘credit search’ which relates to an application for credit, rather than just an ‘enquiry’.

All items marked with a credit search will be seen by potential lenders and can therefore impact an individual’s credit rating.

Insurance quotations should usually show as just an enquiry, as they would not be undertaking a full credit assessment – instead just performing an enquiry to verify your details.

But should customers who visit comparison websites for insurance quotes have credit checks performed on them, even if they are not applying for any kind of credit facility?

A spokesman from confused.com, said: ‘Many insurance and financial services providers operate a credit scoring system and will carry out checks with credit reference and fraud prevention agencies.

‘This will be covered in the privacy policy and/or terms and conditions and these checks do not go ahead without the customer accepting this privacy policy and terms and conditions.

‘It is not the comparison site that is credit searching but individual insurance companies. These searches enable the insurers to give more accurate pricing to the customers.

‘Whether quotes are obtained through a comparison site or directly through an insurer, these searches are likely to be carried out.

Is there anything you can do if you do spot credit checks on your file that don’t fall just under ‘enquiry’?

The spokesman from confused.com added: ‘If a customer who requests to see their file from a credit scoring agency thinks that searches held on the file are incorrect then they can appeal to the insurer  - not the comparison site - to request them to remove them.’

Aside from insurance quotes, it is also important to remember that every application you submit for a loan or credit card may affect your credit score so you may wish to keep these to a minimum to protect your credit rating.


Popular posts from this blog

Study Abroad USA, College of Charleston, Popular Courses, Alumni

Thinking for Study Abroad USA. School of Charleston, the wonderful grounds is situated in the actual middle of a verifiable city - Charleston. Get snatched up by the wonderful and customary engineering, beautiful pathways, or look at the advanced steel and glass building which houses the School of Business. The grounds additionally gives students simple admittance to a few major tech organizations like Amazon's CreateSpace, Google, TwitPic, and so on. The school offers students nearby as well as off-grounds convenience going from completely outfitted home lobbies to memorable homes. It is prepared to offer different types of assistance and facilities like clubs, associations, sporting exercises, support administrations, etc. To put it plainly, the school grounds is rising with energy and there will never be a dull second for students at the College of Charleston. Concentrate on Abroad USA is improving and remunerating for your future. The energetic grounds likewise houses various

Best MBA Online Colleges in the USA

“Opportunities never open, instead we create them for us”. Beginning with this amazing saying, let’s unbox today’s knowledge. Love Business and marketing? Want to make a high-paid career in business administration? Well, if yes, then mate, we have got you something amazing to do!   We all imagine an effortless future with a cozy house and a laptop. Well, well! You can make this happen. Today, with this guide, we will be exploring some of the top-notch online MBA universities and institutes in the USA. Let’s get started! Why learn Online MBA from the USA? Access to More Options This online era has given a second chance to children who want to reflect on their careers while managing their hectic schedules. In this, the internet has played a very crucial in rejuvenating schools, institutes, and colleges to give the best education to students across the globe. Graduating with Less Debt Regular classes from high reputed institutes often charge heavy tuition fees. However onl

Sickening moment maskless 'Karen' COUGHS in the face of grocery store customer, then claims she doesn't have to wear a mask because she 'isn't sick'

A woman was captured on camera following a customer through a supermarket as she coughs on her after claiming she does not need a mask because she is not sick.  Video of the incident, which has garnered hundreds of thousands of views on Twitter alone, allegedly took place in a Su per Saver in Lincoln, Nebraska according to Twitter user @davenewworld_2. In it, an unidentified woman was captured dramatically coughing as she smiles saying 'Excuse me! I'm coming through' in the direction of the customer recording her. Scroll down for video An unidentified woman was captured dramatically coughing as she smiles saying 'Excuse me! I'm coming through' in the direction of a woman recording her A woman was captured on camera following a customer as she coughs on her in a supermarket without a mask on claiming she does not need one because she is not sick @chaiteabugz #karen #covid #karens #karensgonewild #karensalert #masks we were just wearing a mask at the store. ¿ o