Financial comparison websites ‘potentially damaging’, says MoneyExpert research
Some people may damage their credit ratings by choosing inappropriate financial products, says research commissioned by financial comparison website MoneyExpert.com. The report, by Professor Merlin Stone, finds that 8.7 million people have bought financial products through comparison websites in the last year. That is equivalent to 1.1 million sales a month.
However, the research warns that people with poor credit ratings, who apply for loans, mortgages and credit cards can damage their credit rating further if they are refused for these products. Recent MoneyExpert research shows that 2.8 million people have had applications refused in the last year. Some six per cent of people applying for loans, credit cards and mortgages have been rejected. MoneyExpert expects this figure to rise as banks clamp down on easy credit. This follows increases in the level of bad debts.
Professor Stone wishes to see financial comparison websites offer a more rounded service that focuses on factors other than price. He says: ‘Currently they are overly focused on price which means they can provide banks and building societies with poor quality business as there is no attempt to detail the wider attributes of the product or understand the credit position of the consumer before making a recommendation.’