Anyone wanting to purchase payment protection insurance (PPI)should demand the details of any policy they are thinking of buying before agreeing to credit checks, borrowers have been advised.
Providers of many types of PPI – covering mortgages, loans, credit card borrowing etc – currently require applicants to undergo credit checks for suitability before lending them money.
The majority are reluctant to provide details of their PPI policies until credit checks have been carried out.
However, this means that anyone who wants PPI must accept those terms, or seek a loan elsewhere – having been credit checked.
Too many credit checks, successful or otherwise, and lenders will become wary of a borrower.
Brian Brown, associate director at Defaqto, condemned this practice: "Once you are credit checked if you find you don’t like the PPI terms you are left with the choice of taking the loan with it or not at all.
"If you decide to look elsewhere you have then left a credit footprint on your record."
He called upon lenders to make the terms of PPI policies available at the start of the loans application process.
"You should have the opportunity before you are credit checked to see the full PPI policy", he declared. To read more about insurance, click here.
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