Brokers say credit scores from credit rating agency Experian are “misleading” potential borrowers by rating them as “excellent” when their credit history shows otherwise.
Firms say clients are obtaining “excellent” ratings from Experian when they may in fact be turned down for a mortgage, due to factors such as defaults or county court judgments.
Perception Finance managing director David Sheppard says: “Experian should be held to account on this. It creates a false sense of hope in clients’ minds as to their creditworthiness and if Experian cannot grade people correctly then it should stop providing a score, unless it is prepared to lend to these people based on its scores.
“People assume their credit scores will cover their entire credit history and to provide something other than that is somewhat misleading.”
Trinity Financial product and communications manager Aaron Strutt says: “People with 10 missed payments in the last year have been given perfect credit scores, which clearly should not have happened.
“It is a bit of a minefield because lenders all use different credit rating agencies and use these scores as a benchmark.”
A spokesman for Experian says: “The Experian Credit Score is an excellent guide to how a typical lender will assess someone’s credit report and we make this very clear on our website. But it is only a guide.
“The scores we provide cannot be used as a guarantee that a consumer is going to be approved for a mortgage.
“To comply with the Data Protection Act, the score we provide to the public can only take account of credit report information about the individual, whereas lenders’ scores are based on a wider pool of data which can include credit report information about anyone you’re financially connected to.”
“Our scores only show one part of the picture.”