The Advertising Standards Authority (ASA) said the claim made by credit rating service Clear Score that “the better your credit score, the better deals you can get on mortgages”, was not likely to mislead.
The complainant, who worked in the financial sector, believed that an applicant’s credit score was used to determine whether or not they could be lent to, not the mortgage rate they would be offered.
However, Clear Score said it worked with a mortgage partner to provide offers for users and that credit score was an important factor, among others, that affected the range of deals available.
It argued that users with better credit scores would generally have a greater choice of mortgage lenders and offers, so they believed it was true to say that those users could get better deals.
It added that the advert did not say those with a better credit score would receive better rates and that the ad promoted its service as an aggregator of mortgage deals.
Better credit score, more lenders
Clearcast, which pre-approves most British television advertising, said it did not believe the ad implied the mortgage rate offered would be affected by an individual’s credit score.
It added that users with better credit scores would find more lenders prepared to lend to them, resulting in a wider variety of available deals.
The ASA said it understood that credit score was one of the factors used by lenders to determine whether or not to lend to an individual and that a higher score made it more likely that a lender’s mortgage offers would be made available to an individual.
It added that while customers did not receive mortgage offers with rates tailored specifically to them based on their credit score, there was a clear relationship between credit score and the availability of good mortgage deals.
For that reason, the ASA concluded the claim was unlikely to mislead.
The Competition and Markets Authority (CMA) is assessing a proposed merger of Clear Score and fellow credit score service Experian, with a final decision awaited.
In November the CMA has found that Experian’s takeover of ClearScore may result in less intense competition and harm the development of digital products which help people understand their personal finances.