Loan Introducer, 19th July 2013 | Freedom Finance offers ‘soft search’ credit checker
Georgiou advises that the difference between Freedom and the more traditional price comparison site is that Freedom’s soft search tool does not have a detrimental effect on a consumer’s credit rating. The tool works by asking the potential borrower to input their individual details, and then Freedom can find the best-suited loan for their particular circumstances before the borrower begins to apply. The aim of this is to reduce the likelihood of rejected loans, which have detrimental effects on the credit rating of the individual.
This method seems to be popular with potential borrowers as June proved to be a record month for Freedom, with £10.7million worth of loans having been brokered using the soft search loan system. This also led to a 40% profit increase for Freedom Finance in 2013 compared to the previous year.
Georgiou warns that borrowers must ‘be wary of the pitfalls surrounding lower rate lending products’ as lenders are only obliged to offer the advertised rates to 51% of applicants. Again, a soft search would eliminate this risk because eligibility would be determined before a formal application is made.
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