There is no question that price comparison can be a tremendously useful and money-saving activity.
It doesn’t matter what sort of credit product you’re searching for.
It could be that you need a new credit card that will give you something back on your spending, and want to work out precisely which card will deliver the most meaningful rewards.
Or it might be that you’re looking for a new personal loan to help cover the costs of planned home renovations and want to keep the cost of that borrowing to a minimum.
By comparing prices and shopping around, you can ensure that you find the best possible deal. But the way that we compare prices is changing.
And loveMONEY is changing with it.
Table-topping
In the past, price comparison mostly consisted of presenting the key details about the top products in a particular field.
So for example, if you were searching for a credit card that had an interest-free period on purchases, you’d see a table of cards on the market at that time, with the longest 0% period at the top as well as factors like the interest rate charged once that 0% period ended and whether there was also a 0% period available on balance transfers.
It was then up to you to work out which product you wanted to apply for.
Do I qualify?
The problem with that is that as individuals, we might not have a great idea of how likely we are to be accepted for a specific product.
I might like the idea of bagging that credit card with the record-long 0% period, but if the lender only wants borrowers with the most perfect of credit scores and mine is slightly less than perfect, then chances are my application won’t be successful.
This has two negative effects. Firstly, and most obviously, I miss out on the product that I wanted to take out and have to go back to the drawing board.
But there’s also the impact on my credit record. The fact that I made an application for that credit card will be detailed on my credit record, what’s regarded as a ‘footprint’.
Whether that application was successful or not isn’t recorded.
But if I then apply for a different card, the lender will be able to see that I recently applied for the original card and either work out that I was rejected, or conclude that I may be in some financial bother if I need two credit cards within such a short space of time.
In effect, my credit score takes a hit, making it more difficult to actually get hold of credit products in future.
Giving more of a steer
In practice, this means asking a few questions about you and your circumstances so they can ensure the products you are shown are only those which you are likely to be eligible for.
After all, there’s no point highlighting products that you can’t get, and which will only end up hurting your credit score further should you try to apply for them.
At loveMONEY, we have always been passionate about helping our readers make the best, most informed decisions about their money.
And that includes the products you apply for.
As a result, our articles will no longer direct you towards individual products but instead towards relevant eligibility checkers so that you are always fully up to speed on the best products that you as an individual could get.
To be clear, we will still show you the best rates and deals and review individual products, highlighting their pros and cons and what sorts of people they could particularly suit. But we will no longer link to individual products through our articles.
A question of eligibility
There’s no escaping the fact that the pandemic has dramatically impacted the finances of millions of people across the country.
Lenders are openly talking about the end of the ‘vanilla’ borrower, those people with a steady and unexciting credit history who have traditionally enjoyed the very best products available.
As we all learn to deal with the late or missed payment, payment holiday or change to our incomes, it’s never been more important to take a savvier approach to price comparison and focus on the products that we qualify for as individuals, rather than get hung up on best buy tables filled with deals which may simply be out of our reach.