Is there a way to know if a broker has accessed my credit file?

Discussion in 'Loans & Mortgage Brokers' started by RoadRunner, 2nd Mar, 2020.

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  1. RoadRunner

    RoadRunner Active Member

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    Hi,

    I am trying to get my head around with credit enquiries, credit check, veda1.1, credit score, comprehensive credit score, soft access, hard access etc...

    questions:

    1. Can someone please explain me what they all mean?

    2. When a broker access credit file, does it get recorded in credit file ? and does it contribute to lowering credit score?.

    3. Is there a way to know if a broker has accessed my credit file without permission?

    4. Usually customer can get equifex credit file report by paying $10. Is this report same as what broker gets? Is that different from what lender gets?

    5. Some lenders use veda1.1 score (which is much lower than overall score) however, other lenders use overall score. Do they lower their benchmark while using veda1.1?

    6. Why can't lenders "softly" (whatever that means) access the credit file?

    7. What extra information "hard" access show that a "soft" access doesn't.

    Bigger question:
    Why is customer penalized for shopping around for finances?
     
  2. The Y-man

    The Y-man Moderator Staff Member

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    Not sure how things have changed, but my understanding (in a *very* simplified way) is:

    Suppose you are a lender.

    You have thousands of people asking you to lend them money every day.

    You want to make sure you lend responsibly - i.e. only to people who can realistically pay you back (both for your own profit and also to keep the regulators at bay).

    One thing you want to check is that the borrower has a reasonably clean history with loans.

    Because you don't want to spend too much time / money, you do a quick "soft" check (as you called it) to see if you have any "hits" in the credit history. This enquiry does not record anything on the borrowers credit history.

    You see none, and you tell the borrower, "Ok!".

    The borrower then says "cool!" and puts in a full application.

    Now you have to be sure about this person's credit history for good governance (you don't want the regulator coming back saying did you *really* check this person's credit history?) so you put in a "hard" enquiry. This enquiry get recorded in the borrower's credit file.

    The enquiry comes back fine, and you tell the vendor, "No problem, finance approved!"

    Now in the meantime, the borrower has found a better deal with another lender (your competitor). The borrower approaches them.

    They do the same process.

    The borrower shops around and goes to another lender... and so on.

    Now eventually, when a lender (the 5th the borrower has approached) does a soft check.... hello there are 4 credit entries (very recently) from the "hard" enquiries done by the other lenders. Now as I understand it, the reporting system behind all this doesn't tell the lender the nature of the entry when they do a "soft" enquiry (due to privacy concerns as you have flagged).

    The 5th lender being rather busy (plenty of borrowers) doesn't want to waste time/effort/ money doing a "hard" enquiry to see if the borrower qualifies (the borrower might have had 4 cases of defaulting on loans for all they know), and just says "Sorry, no."

    Therefore it's important to know when shopping around that the lender isn't doing a "hard" (or "full") credit enquiry that results in a "hit" on the file.

    The other edge of the sword is that unless the lender does a "hard" enquiry, they can't say for sure that they will be able to lend the money to the borrower.....

    The Y-man
     
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  3. Brady

    Brady Well-Known Member

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    Not so much busy, before the changes to credit sharing data (now show's facility limits instead of just enquiry) the concern was each lender you go to you change some financial details, leave out a card here, account in arrears there etc.
    Thought being seeing 4-5 different institutions it would have been reasonable to expect some level of service and product that suited.
    Now big brother knows more...

    Simply don't proceed to full assessment if you don't expect to proceed.
     
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  4. Peter_Tersteeg

    Peter_Tersteeg Well-Known Member Business Member

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    A couple of recent credit enquiries suggests that you're shopping around. No big deal. Many, many recent credit enquiries suggests that you're desperate for someone to give you the money. Would you lend money to someone that multiple others had possibly rejected?

    People get very adept at figuring out what lenders what to hear. With every enquiry they learn something and change their story until someone gives them what they want. A lot of enquiries is a fairly certain sign of this.

    Also if a broker is going to run a credit check, they should be getting you to sign a written consent form first. If you want to see what's going onto your credit file, you can subscribe to an alerts program - mycreditfile.com.au
     
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  5. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Plus Member

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    I've been a broker for nearly 20 years and have never accessed anyone's credit file
     
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  6. RoadRunner

    RoadRunner Active Member

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    I asked my current broker to access it (by signing a privacy form). He charged me $10(I think that's what costs him to retrieve it).

    Wondering if I can check how many brokers in past accessed my file without permission. Is there a way to check that since soft accesses are also get recorded somewhere.
     
  7. Peter_Tersteeg

    Peter_Tersteeg Well-Known Member Business Member

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    If you've recently gotten a copy of your report, it will show any accesses within the last 5 years.

    The brokers that specialise in credit impaired loans likely do this as a part of their process. However the majority of brokers likely don't access credit files. It does cost us money and for the most part it doesn't add much value. In my experience it's quite rare that someone has a credit problem that they don't know about. For those that come with a problem, I ask them to get it themselves and forward it to me (far less compliance work for me to do it this way).
     
  8. Lindsay_W

    Lindsay_W Well-Known Member

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    There's a key different between retrieving a copy of your credit report and 'accessing' the credit file - most likely the broker did the former and this does not affect your credit score.
    I always get a copy of the clients credit report prior to applying for any finance - best to find out about those forgotten telco debts (or other similar 'forgotten debts') before the lender does. However the way it works with us is that we're requesting it on behalf of the clients therefore technically not 'accessing' the credit file more so just requesting the credit report.

    What's the actual issue you're having though?
     
  9. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Plus Member

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    Why not just request a free copy?
     
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  10. RoadRunner

    RoadRunner Active Member

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    Free copy wait time is up-to 1 week(from equifex). Paid($10) is instant.
     
  11. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Plus Member

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    Most times the free copy is received the same day.
     
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  12. RoadRunner

    RoadRunner Active Member

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    I want to know if any past broker accessed(soft) my credit file in last few years.

    My current broker did it using their internal system. So I assume their identity gets recorded somewhere.
     
  13. Marty McDonald

    Marty McDonald Mortgage broker Business Member

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    "Access Seeker" is what the broker can get and I have been told by numerous industry people inside the banks and my aggregator that it DOES NOT show as an enquiry and therefore doesn't affect credit score.

    I am getting copies of the reports more and more nowadays (either asking clients to get a free or paid version or ordering myself) because as all loans and credit cards are on the files now Im getting more than the odd card that is not being declared (usually Hardly normal / flatitude etc) which causes a lot of hand wringing at the lenders end. Some lenders even declining if cards not disclosed and once a statement is received it shows they are actively used.

    Re access without permission its a grey area. I think you will find most brokers credit guides / credit proposal documents include commentary about credit reports. You may have given them permission by engaging their services that way without expressly signing something for the credit check.
     
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  14. Lindsay_W

    Lindsay_W Well-Known Member

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    Ok but I fail to see why this is an issue seeing as it would not have an affect on your credit score if they did access a copy of your file. Is it just a matter of principal or something more?
     
  15. Peter_Tersteeg

    Peter_Tersteeg Well-Known Member Business Member

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    A 'soft' enquiry probably won't show up. You could just ring the previous brokers and ask.

    Overall I don't really see what the big deal is. If it's something happened previously, it will be on your recent credit report.

    If you're worried about a broker knowing too much about you, the credit report isn't really a big deal. These days I go through everyone's bank statements line-by-line. I know more about what clients spend their money on than they do (and I really wish I didn't, it takes a huge amount of time).
     
  16. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    Suspect none unless you have signed a privacy and disclosure agreement with them.

    ta
    rolf
     
  17. RoadRunner

    RoadRunner Active Member

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    I didn't want to write that on public forum but since everyone asking....
    I am under suspicion that a "friend" used my past broker (who they have close friendship with) to access my credit history. The "friend" boasted about knowing my credit details in front of me and my other friends during a social gathering.

    I can't take any legal action against that broker unless I have a proof.
     
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  18. Brady

    Brady Well-Known Member

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    Need new friends...

    I'm confused though... your past broker would know your credit details if they completed an application....
    Sounds like the past broker might have breached privacy and discussed with the said 'friend'
     
  19. Lindsay_W

    Lindsay_W Well-Known Member

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    Thanks for letting us know, it does help to know the full story.
    That's concerning, breach of privacy potentially
    Not sure if you've sought legal advice yet, I'm wondering if you need hard proof or if just the fact that your friend knew your financial info that only you and the broker would know, would be enough evidence?
     
    Last edited: 3rd Mar, 2020
  20. Paul@PFI

    [email protected] Tax Accounting + SMSF Business Plus Member

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    I would be asking the friend why the friend said that. It may have been in jest based on them knowing you are also a client. Then the friend has been totally inappropriate but it doesnt mean the broker has done anything wrong if it was made up to be a joke for example. Let them know that it may seem a joke but it suggests a concern and ask them to explain themselves. If they admit to having had discussion about you you should then frankly discuss this with the broker and let them know you are considering making a formal complaint. A complaint must be initiated with the broker firm first.

    And also ensure the lender terminates all access, contact and any relationship for your account. A fee clawback may be enough of a slap to send a message. IDK - Have another broker appointed which ends their fee trail ?? Money penalties may send a loud message.

    If there has been a breach you may have recourse through their professional body (check website or ask) , privacy commissioner and AFCA. If they are employed or a contractor the employer is a good start. They may each investigate the issue and even censure the broker for failing to maintain privacy. Brokers are audited for compliance regularly.

    Professionally silence is generally the best position when dealing with parties who know each other. I go to pains to ensure each party knows that the information we have is never discussed, shared or mentioned to the other. AT ALL. If I am asked a question of conflict which relates to the other party it may indicate an ethical conflict