CAMPAIGNERS CALL FOR NEW RULES ON CREDIT

At present, borrowers can generally not find out the rate they will be charged for these products without applying for a quote.

However, every time you apply for a loan or credit card, a footprint is left on your credit record, which can affect your chances of borrowing.

Even if you reject the quote, this footprint is visible to any other providers who will then use this information when making their credit decision.

If a borrower has a high number of searches in a short space of time, it could appear they have been turned down by other banks. This means they may be declined, or could get charged a higher rate of interest.The Treasury Select Committee is currently reviewing the credit search market and the impact of multiple credit searches on credit ratings.

Campaigners have welcomed this probe.

“We are delighted the Committee is looking at this as part of its investigation into the credit search sector,” said a spokesman for Nationwide building society.

Nationwide is one of a small band of lenders to offer a “soft quote” or “quotation search” facility which provides a realistic idea of the actual rate a borrower will pay — without leaving a history.

Some other banks and building societies have the capability to offer this service, but do not offer it.