Your lenders are spying on your clients

If you're a piece of a business, be it a recruiter or an accountant, the chances are you have customers. And if your customer has bad credit, chances are he's going to end up on your lender's radar. And unfortunately for your clients, that lender is going to use every piece of data they can get their hands on in order to determine whether or not you'll be getting any more money from them in the future. It sounds like someone's got their eye on you too.

For the first time in history, credit lenders now have access to detailed information on your clients and their credit worthiness. The implication for employers is clear, bad credit can impact your business.

If this sounds worrying, that's because it should: anyone who is lending money has gained a wealth of insight into how vulnerable your customers are and how likely they are to pay up. This isn't the kind of knowledge you want in the hands of someone who will decide whether or not you get any more business from them.

As a result, you need to make sure your customers are in a position to get the best deal. It's key that you help them avoid the worst damage from their credit score by supporting them to pay down their debts, improve their credit rating and prevent further damage.

If you have any concerns about this, contact us today. [email protected], or call 0203 957 1805.

How lenders are spying on your clients with credit scores

Back in 2005, lenders began sharing details of your business' customers through Credit Scoring Agencies and Credit Reference Agencies (CRAs). This gives banks greater insight into how likely people are to pay back loans. This isn't the kind of information you want lenders to have access to, especially if you're worried about the financial health of your clients.

If someone can see what loans your clients have, and how much they owe, it becomes easier for them to judge when a client is likely to default. CRAs started sharing details on people with poor credit performance data in 2012. This means that lenders now have access to more than just a score: they can see if someone has missed payments or fallen behind on their repayments before.

Similarly, you also need to be worried if your customers start missing payments because of the information available on them in credit reference agencies. When this happens, you're likely to get a call from the lender who provided the loan asking you to help them collect on the missed payments.

To make matters even worse, it's not only lenders that have access to all of this information: your competitors do too. This means that businesses will soon be able use all of this data on your customers against you when they pitch for new business.

Recruitment agencies are likely to suffer as a result of credit scoring agencies, because they are more vulnerable than accountants and other similar businesses. That's because recruiters tend to focus on applicants with bad credit scores and those who lack work history.

This means that banks will have access to a lot of your customers.

How to protect your business from credit score data sharing

Unfortunately, there's not a lot you can do to prevent this sort of data sharing. However, you can take the following steps to help improve your customers' credit scores so that they get a better deal when it comes to future loans:

Advise them on their credit report: let them know what's on there so they know how best to improve it. Advise them about how their credit score is calculated: let them know what lenders look for so they can avoid damaging their score in the first place. Help them get better offers: if they're going to pay off debt, pay off bad debts, or improve their credit rating, you should help them with these tasks. It's also a good idea to advise your clients about how long it will take for their score to improve. Advise them about other information on their credit report: some of this data might be useful for improving their credit score. For example, if they've changed jobs recently then there's a chance that the new job will be listed on their credit report. Even though this doesn't increase your clients' score directly, it improves their chances of getting better deals in the future because lenders are more likely to lend to people who have been working for a while.

Our team can help you protect your customers from credit score data sharing, contact us today. [email protected], or call 0203 957 1805.

Why the banks are spying on your clients with credit scores

In 2005, banks started sharing detailed information about what businesses did with their money to the CRAs and Credit Reference Agencies (CRAs). The primary benefit for the banks was giving them a greater insight into how likely customers were to pay back loans, thanks to a wider range of data from loan accounts. That's when Credit Scoring Agencies and Credit Reference Agencies (CRAs) began sharing details of people with poor credit performance data.

It's not just banks that have access to all of this data: your competitors will also have access to it too. This means that businesses will soon be able to use all of this data on your customers against you when they pitch for new business.

Recruitment agencies are likely to suffer as a result of credit score agencies, because they are more vulnerable than accountants and other similar businesses. That's because recruiters tend to focus on applicants with bad credit scores and those who lack work history.

This means that banks will have access to a lot of your customers.

What you need to do to protect your customers from credit score data sharing

Unfortunately, there's not a lot you can do to prevent this sort of data sharing. However, you can take the following steps to help improve your customers' credit scores so that they get a better deal when it comes to future loans:

Advise them on their credit report: let them know what's on there so they know how best to improve it. Advise them about how their credit score is calculated: let them know what lenders look for so they can avoid damaging their score in the first place. Help them get better offers: if they're going to pay off debt, pay off bad debts, or improve their credit rating, you should help them with these tasks. It's also a good idea to advise your clients about how long it will take for their score to improve. Advise them about other information on their credit report: some of this data might be useful for improving their credit score. For example, if they've changed jobs recently then there's a chance that the new job will be listed on their credit report. Even though this doesn't increase your clients' score directly, it improves their chances of getting better deals in the future because lenders are more likely to lend to people who have been working for a while.

Conclusion

Here at Credit and Finance, we're all about helping businesses improve the lives of their customers. That's why we're so vocal about the need to protect people against credit score data sharing. We have done the hard work for you, allowing us to speak to many different businesses including accountants, lawyers and estate agents.