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COULD USING LENDING NETWORKS EFFECT MY CREDIT?
Will your credit score be affected by obtaining a loan thru online lending networks?
Lending firms have consulted with credit reporting agencies on an individual basis for some time now. However with the recent surge of online lenders pre-approving loans electronically many loan seekers have rightfully been concerned about how this might affect thier report and ability to shop for a better loan offer. Shopping for a loan is crucial to obtaining a loan program at a rate one can live with. For many, shopping online for the better rate and having lenders and brokers compete for your business is not an option in todays busy and highly competitive financially structured society.
Yet will your credit score be affected by obtaining a loan thru online lending networks? There are steps one can take both to protect their credit and correct errors. Consumer rights and advocacy groups offer information on fair credit reporting, abuses in the reporting industry, and more. These institutions have been put in place to work with consumers to reduce and eliminate credit report abuse by lending companies.
The law of consumer credit is primarily embodied in federal and state statutory laws. These laws exist both to protect consumers and enforce specific guidelines for the credit industry. In addition States have passed a number of statutes regulating consumer credit. The Uniform Consumer Credit Code is one of these. Among it objectives is to protect consumers obtaining credit to finance their transactions, ensure that adequate credit is provided, and govern the credit reporting industry.
The Consumer Protection Act passed by Congress regulates the consumer credit industry. Creditors are required to disclose credit terms to consumers. Federal consumers protection agencies protect the public from loan sharks, impliments restrictions in garnishing of wages and investigates fraudulent practices in the consumer credit finance industry.
Recent changes in the law allow for a fixed window in which you can have your credit checked a number of times and your credit maintain its standing as long as you get a loan within that time frame.
While this is a new law it is always best to proceed cautiously whenever doing anything that may affect your credit.
Some scoring models are being adjusted to count multiple inquiries within a short period of time as a single credit check. Still, numerous credit checks over a short period of time can have a negative effect on credit scores if a loan is not obtained shortly there-after.
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For more information on what consumers in the financial industry are doing go to Mortgage Loan Search
Author: Mark Askew
Editor for the Mortgage Loan Search Network, the MLS Rate Watch Program Newsletter and a host of e-business periodicals
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