Price comparison websites have become popular with millions of people frequently using them to hunt out deals.

But in searching for best value insurance quotes, many of us may inadvertently leave a footprint on our credit scores. And we all know how important it is to keep on top of that.

When consumers use comparison sites to source insurance quotes, it can trigger some insurers to access credit data to assess someone’s suitability for a premium installment payment plan (spreading payments for an annual premium over one year). Credit searches also help the insurer give customers more accurate quotes.

However, the impact on your credit score depends on the type of search that is carried out on your file. Look out for a ‘credit search’, as opposed to an ‘enquiry’, on your credit report. This indicates an application for credit and affects your credit rating directly. Plus, all credit searches will be seen by potential lenders, possibly impacting your future chances of securing a credit card, loan, mortgage or service.

Since many insurance providers carry out checks with credit reference and fraud prevention agencies, it’s important that consumers understand that in using comparison websites, they may secure a great value product in the short term, but their longer term credit rating could be severely dented.

To protect your credit rating, be wary when searching for insurance quotes on comparison sites. And although it’s a risk, it’s also worth noting that credit checks do not happen unless the consumer accepts the terms and conditions. So always read the T&Cs and/ or the website’s privacy policy.

If you’re concerned about the impact of using comparison websites on your credit rating and you want to find out more, just give me a call.

 

Posted in General Insurance, Insurance