"It's absolutely vital advisers have up-front access to their client’s credit report (and bank statements) before they move down any potential recommendation route."
Take, for instance, the Government’s announcement last month that all mortgage borrowers would be eligible for a three-month payment holiday.
The news would have been welcome to many thousands upon thousands of borrowers who could foresee difficulty in making their payments over the next three months, but they might not have fully understand what a ‘holiday’ was, that they would be extending their term, that they may not be able to change product during the period of the holiday, or indeed that the announcement might have caught lenders on the hop and that it was not something they could simply do automatically.
Setting up the processes, and indeed moving resources around to be able to work with borrowers to deliver these holidays, would be a major undertaking at any time, let alone when the economic environment was being changed so much by the coronavirus.
It’s therefore not surprising that lenders were initially inundated with enquiries, that they had to move fast to set up online systems to deal with this or that their customer service resources were severely stretched as many people were asked to work remotely.
On top of this, of course, is the potential impact on the individual’s credit score/report as a result of taking out a holiday. As you’ll know, normally this would be marked on the report and would have an impact on the individual’s credit rating, so again it wasn’t surprising to see much angst about whether, in these extraordinary circumstances, this would continue to be the case.
Thankfully since then the major credit agencies, including Equifax, have confirmed an ‘emergency payment freeze’ meaning those who have taken an organised holiday will not be unduly impacted. Or at least should not be.
The important point to make of course is that this ‘credit freeze’ is only available to those borrowers who’ve made an official agreement with their lender. Unfortunately, there will be those who blindly went ahead and cancelled direct debits under the misapprehension that this was a blanket-wide situation, rather than one that required specific agreement from the lender.
I therefore suspect that in, future months, when advisers are offering their services and recommendations to clients, they may find a rather large discrepancy between what the client thinks their credit report/score looks like, and the reality of the situation. Some may be basic mistakes that can be queried and rectified, however for those who may not have gone through the proper channels, it might be a different picture.
In that sense, no-one can deny that it's absolutely vital advisers have up-front access to their client’s credit report (and bank statements) before they move down any potential recommendation route. A large amount of work could be undone if the report paints a different picture, and in this pre-sales work utilising a product like our solution Credit Assess, provides all that up-to-date information within minutes direct to the adviser so they have complete clarity.
This ‘credit freeze’ is welcome but it won’t alter the fact that, for a large number of people, their credit score could shift in the coming months. Forewarned is most definitely forearmed here, and advisers are in the best place to have all the information they need to ensure there are no potential surprises further through the advice journey.
