Impact Of PPI Claims On Credit Scoring

In today’s world, credit rating has to be taken care of carefully. It helps you in times of financial needs to attain loans. Any kind of negative effect can damage these scoring. Therefore, borrowers make sure to protect it every time.

The Worst Financial Scenario in UK

PPI claims are common after the exposure of the big scandal in 2006. An investigation was conducted by FSA in the United Kingdom. It exposed the biggest financial scandal. How trusted organizations were swindling their loyal customers in thousands for many years by selling PPI in the wrong way.

How was PPI Mis-sold?

PPI is a good policy designed to secure credit card payments or loan in case you are ill or temporarily unemployed. Selling PPI is not wrong, but the way it is sold is the problem.

Different Ways the PPI was Mis-sold-

  • Without fully explaining its coverage

  • Without the consumers knowledge

  • Just added it as a complete package

  • Sold without eligible criteria – underage, retired, self-employed, unemployed at that time, employed on contract basis or having medical condition

  • The worst scenario is that the customers were made to believe that it was mandatory to get a loan.

Why were PPI Mis-sold?

Answer is simple, it is appraised that the revenue of PPI was £6 billion to loan companies and UK banks generating extra profit of £1.4 billion.

High court has ordered banks to re-open thousands of mis-sold PPI policies and pay compensation to the victims. Today, banks are facing multi-billion pound reimbursement expense.

Most Important Question

Last several years have seen people claiming PPI, but one question that they frequently ask is – ‘Will PPI impact my credit rating?’

When can PPI Claims not Affect Credit Ratings?

In many cases going for PPI claim does not affect the credit score, but you have to pursue the right procedure. All the firms controlled by FSA have to observe the principles of FSA Handbook that ‘A firm must respect customer’s interest and treat them honestly’. The TCF rules are introduced to raise the confidence level and standards of the financial institution sector.

The banking code protects their customers because it is unethical for any kind of business to disapprove for claiming what is fairly yours. Therefore, going for PPI claim should not impact your relationship with lenders or bank.

When does PPI Claim Affect your Credit Score?

Even after filing the PPI claim never default on your monthly policy premiums. Many loan agreements had PPI policy added and in case you stop paying for PPI then it can be detected as a default on your original loan agreement. This can impact your credit score.

You can contact a CMC to reclaim your money and enhance your card rating in an indirect manner. If PPI was added in your credit card, chances are that you may be still paying the premium. With the awarded money from your PPI reclaim you can make your credit card payment very fast. This can help you elevate your credit rating. Ultimately, there is no loss done in hiring professional PPI claim services.

Author’s Bio:

David has written this article and he works with one of the top PPI claim firms in Lancashire. They offer legal assistance to help you claim your PPI refund within the shortest duration. Feel free to visit their website for more info.