Chill for borrowers as the trail goes cold
Keep an eye on your credit reference, writes Sam Dunn, or mistakes by others may leave you frozen out for new loans
Sunday 18 July 2004
Have you read the story of your finances this weekend? All borrowers have one, in the form of a credit report that clocks all your loans, mortgage payments and plastic transactions. It is monitored by the three UK credit reference agencies - Equifax, Experian and Callcredit - and also makes a log every time lenders rake over your file.
According to Experian, the biggest of the agencies, consumers using its online service now look up their credit report at least once a month.
With an average of five credit arrangements each, our fears of identity theft and concern over debt repayments and rising interest rates have contributed to the rising take-up of the service, although at £50 for a year's unlimited access to your credit file, it doesn't come cheap.
Many people may not feel the need to keep such a close eye on their financial footprints. After all, if they don't regularly miss loan repayments or take on more credit card debt than they can handle, then why should they worry?
However, a healthy report is essential for credit card or mortgage applications and you need to keep tabs on it in case your story gets distorted through circumstances beyond your control. And such problems may not be the result of fraud; they could be down to bureaucratic bungles.
Independent on Sunday reader Nigel Knox found this out after trying to help his girlfriend clear big debts to Barclays bank and the credit card company Goldfish. The lenders had sold these balances on to separate debt collectors - a common practice in the financial services industry when outstanding repayments become an expensive problem.
In this case, Mr Knox paid off his girlfriend's loans but no record of this found its way to the credit reference agencies, thanks to a failure of debt settlement protocol between the big lenders, their debt collectors and the agencies.
As a result, when he tried to arrange a remortgage with his girlfriend, Mr Knox discovered that the wrongly blemished credit reports were convincing lenders to turn them away.
The communication breakdown has left the couple unable to get a new mortgage for well over a year. "It seems like we fell right through a hole in the system," says Mr Knox.
Had he known, he could have written to the reference agencies to request a "note of correction" be posted on both his and his partner's credit report.
You can write up to 200 words to explain your unhappiness at a particular credit status and this alert will be read by every lender, providing a more accurate snapshot.
Credit agencies will normally look into any problem but, failures by lenders aside, the way the service works has some way to go. In particular, consumer awareness needs to be improved and Equifax and Experian are flagging the benefits of writing in - for free - to place correction notes.
There are other flaws. For example, lenders won't always give a full picture of their own customers' finances. Depending on the type of account you hold, some of the UK's biggest banks only release limited data.
Late payments or multiple applications for credit cards by LloydsTSB current account customers may go unnoticed by other lenders during a credit check, simply because its policy is only to reveal a "default" history - where repayments have fallen seriously behind.
"There can be gaps," says James Jones of Experian, "but pressure is now on the industry to share full information."
Write to the reference agencies if you feel you are being unfairly turned down for credit or you have a query. For a fee, you can even see what credit score they give you. You can also check your credit report by post: the statutory fee is £2.
Don't forget, you're stuck with a bad record for a long time. Experian's database notes late payments for at least three years and court judgments blot your score for six years.
Write to: Equifax, Credit File Advice Centre, PO Box 1140, Bradford BD1 5US; Experian, Consumer Help Service, PO Box 8000, Nottingham NG80 7WF.
- 1 Michelle Obama highlights harsh restrictions faced by Saudi women after meeting King Salman without wearing a headscarf
- 2 Saudi preacher who 'raped and tortured' his five -year-old daughter to death is released after paying 'blood money'
- 3 Kim Kardashian on Bruce Jenner's 'story': 'We support him no matter what, and I think when the time is right, he'll talk'
- 4 Amal Clooney gives excellent response to fashion question at European Court of Human Rights
- 5 A bottle of wine a day is not bad for you and abstaining is worse than drinking, scientist claims
9 reasons Greece's experiment with the radical left is doomed to failure
'We would evict Queen from Buckingham Palace and allocate her council house,' say Greens
Greece elections: Syriza and EU on collision course after election win for left-wing party
British Muslim school children suffering a backlash of abuse following Paris attacks
Have we reached 'peak food'? Shortages loom as global production rates slow
British grandmother Lindsay Sandiford faces execution by firing squad in Indonesia
iJobs Money & Business
£13000 per annum: Recruitment Genius: This Pension Specialist was established ...
£23000 - £26000 per annum + Benefits: Ashdown Group: Market Research Executive...
£25000 - £35000 per annum: Recruitment Genius: A Technical Report Writer is re...
Competitive salary & benefits!: MBDA UK Ltd: MBDA UK LTD Indirect Procurement...
Day In a Page
Hibernate during winter and make your living during the summer at this busy guesthouse with panoramic sea views, in the village of Lynton
A four-bedroom penthouse next to the Tate with direct views of St Paul's from two floors of luxurious living space
A four-bedroom detached home surrounded by spacious gardens and woodland, close to New Pudsey
An 18th-century, three-bedroom home near Langstone Harbour built from ships beams with vaulted ceilings and wood burning stoves
A five-bedroom semi-detached home with a mix of period and modern features in a popular and convenient location
This five-bedroom red-brick beauty overlooks the village green and sits in just under two acres of land
A three-bedroom villa with self-contained flat, minutes from Lake Windermere
A deceptively spacious, beautifully presented Georgian home with 3000sq ft of living space and five reception rooms
A five-bedroom Victorian home with four receptions, superb gardens and paddock in Pembury
An eight-bedroom house on the south side of the The Green with cinema, wine cellars and summer house
This 17th century beauty is full of rustic cosiness, while the detached home office means you can also run a business
Four exclusive apartments in a Grade II-listed former medical school with 2,275 sq ft of living space and 18ft ceilings
A five-bedroom terraced house on the popular Peterborough Estate, ideally located for both Eel Brook Common and South Park
A state-of-the-art farm-building conversion on the former Cliveden Estate, with 11,420sq ft of internal space, cinema and wine cellar
A three-bedroom, 15th-century cottage with original features in the picturesque village of Sissinghurst
A six-bedroom terraced house with large south-facing roof terrace, cinema room and wine cellar
A new seven-bedroom home built in Queen Anne-style with swimming pool and parkland views in Mortimer
A listed, four-bedroom farmhouse in the rural hamlet of Rushall with detached barn, four acres of gardens and paddocks
A first-floor flat with two bedrooms, a spacious reception room and communal grounds in a leafy part of London
A three-bedroom flat with a spacious rootop terrace and balcony, accessed from a private gated courtyard
A Grade II-listed pile with six bedrooms, stables and 39 acres of grounds in Standlake
A two-bedroom flat with boutique hotel-style interiors, close to the foodie haunt of West End Lane
A two-bedroom flat in a beautiful old vicarage, with many original features, close to the city centre
A three-bedroom 16th-century home with an aga kitchen, private gardens and heated outdoor pool, in Hadleigh
A three-bedrom home in sought-after Queen's Gate Mews, with Italian marble-finished bathrooms
Surrounded by glorious countryside in the village of Udimore, sits this impressive four-kiln oast and barn conversion
A five-bedroom house in the picturesque village of Kettlewell, north Yorkshire
An 18th-century former coaching inn with original staircase, open fireplaces and beams throughout
A Grade II-listed Georgian town house with three bedrooms and a south-facing courtyard, near Arundel Castle
Feel on top of the world at this über chic penthouse on the 37th floor of one of Europe’s tallest blocks.
A Grade II-listed Victorian villa with six bedrooms and two further cottages, all with spectacular sea views
A grade II-listed, Georgian cottage with mature 50ft garden, perfect for summer entertaining
A magnificent Georgian pile with turrets, seven bedrooms, a heated pool and four acres of gardens
Fairoak Farm has five bedroom suites, gym, outdoor swimming pool and golf course
Chic two-bedroom river-fronted flat with a private lift that delivers you directly to your home
A spectacular seven-bedroom Tudor pile, once owned by Henry VIII, with 18 acres of land
A seven-bedroom Georgian property previously used as a picturesque wedding venue
A split-level flat in a church conversion with two en suite bedrooms and 1,200sq ft of living space
A three-bedroom bungalow situated behind an impressive stone wall, £645,000
Windsor Castle overlooks this three-bedroom Victorian cottage located on one of Windsor's smartest roads
Chapel House is a former vicarage with nine bedrooms in the beautiful Upper Wye Valley
A five-bedroom B&B and separate owner's accomodation with potential for conversion
Enjoy summer by the Thames in this two double-bedroom converted warehouse in Rotherhithe village