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

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.

Alexis Sanchez has completed a £35m move to Arsenal, the club have confirmed
sportGunners complete £35m signing of Barcelona forward
Poor teachers should be fearful of not getting pay rises or losing their job if they fail to perform, Steve Fairclough, headteacher of Abbotsholme School, suggested
voicesChris Sloggett explains why it has become an impossible career path
world cup 2014
Ray Whelan was arrested earlier this week
Arts and Entertainment
In a minor key: Keira Knightley in the lightweight 'Begin Again'
Arts and Entertainment
Celebrated children’s author Allan Ahlberg, best known for Each Peach Pear Plum
peopleIndian actress known as the 'Grand Old Lady of Bollywood' was 102
Wayne’s estate faces a claim for alleged copyright breaches
newsJohn Wayne's heirs duke it out with university over use of the late film star's nickname
Life and Style
It beggars belief: the homeless and hungry are weary, tortured, ghosts of people – with bodies contorted by imperceptible pain
lifeRough sleepers exist in every city. Hear the stories of those whose luck has run out
Mick Jagger performing at Glastonbury
Life and Style
fashionJ Crew introduces triple zero size to meet the Asia market demand
Santi Cazorla, Mikel Arteta and Mathieu Flamini of Arsenal launch the new Puma Arsenal kits at the Puma Store on Carnaby Street
sportMassive deal worth £150m over the next five years
Arts and Entertainment
Welsh opera singer Katherine Jenkins
musicHolyrood MPs 'staggered' at lack of Scottish artists performing
Life and Style
beautyBelgian fan lands L'Oreal campaign after being spotted at World Cup
Arts and Entertainment
Currently there is nothing to prevent all-male or all-female couples from competing against mixed sex partners at any of the country’s ballroom dancing events
Potential ban on same-sex partners in ballroom dancing competitions amounts to 'illegal discrimination'
Finacial products from our partners
Property search
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Business Analyst Consultant (Financial Services)

    £60000 - £75000 per annum: Harrington Starr: Business Analyst Consultant (Fina...

    Systems Administrator - Linux / Unix / Windows / TCP/IP / SAN

    £60000 per annum: Harrington Starr: A leading provider in investment managemen...

    AVS, JVS Openlink Endur Developer

    £600 - £700 per day: Harrington Starr: AVS, JVS Openlink Endur Developer JVS, ...

    Technical Support Analyst (C++, Windows, Linux, Perl, Graduate)

    £30000 per annum: Harrington Starr: A global leader in trading platforms and e...

    Day In a Page

    A History of the First World War in 100 Moments: Peace without magnanimity - the summit in a railway siding that ended the fighting

    A History of the First World War in 100 Moments

    Peace without magnanimity - the summit in a railway siding that ended the fighting
    Scottish independence: How the Commonwealth Games could swing the vote

    Scottish independence: How the Commonwealth Games could swing the vote

    In the final part of our series, Chris Green arrives in Glasgow - a host city struggling to keep the politics out of its celebration of sport
    Out in the cold: A writer spends a night on the streets and hears the stories of the homeless

    A writer spends a night on the streets

    Rough sleepers - the homeless, the destitute and the drunk - exist in every city. Will Nicoll meets those whose luck has run out
    Striking new stations, high-speed links and (whisper it) better services - the UK's railways are entering a new golden age

    UK's railways are entering a new golden age

    New stations are opening across the country and our railways appear to be entering an era not seen in Britain since the early 1950s
    Conchita Wurst becomes a 'bride' on the Paris catwalk - and proves there is life after Eurovision

    Conchita becomes a 'bride' on Paris catwalk

    Alexander Fury salutes the Eurovision Song Contest winner's latest triumph
    Pétanque World Championship in Marseilles hit by

    Pétanque 'world cup' hit by death threats

    This year's most acrimonious sporting event took place in France, not Brazil. How did pétanque get so passionate?
    Whelks are healthy, versatile and sustainable - so why did we stop eating them in the UK?

    Why did we stop eating whelks?

    Whelks were the Victorian equivalent of the donor kebab and our stocks are abundant. So why do we now export them all to the Far East?
    10 best women's sunglasses

    In the shade: 10 best women's sunglasses

    From luxury bespoke eyewear to fun festival sunnies, we round up the shades to be seen in this summer
    Germany vs Argentina World Cup 2014: Lionel Messi? Javier Mascherano is key for Argentina...

    World Cup final: Messi? Mascherano is key for Argentina...

    No 10 is always centre of attention but Barça team-mate is just as crucial to finalists’ hopes
    Siobhan-Marie O’Connor: Swimmer knows she needs Glasgow joy on road to Rio

    Siobhan-Marie O’Connor: Swimmer needs Glasgow joy on road to Rio

    18-year-old says this month’s Commonwealth Games are a key staging post in her career before time slips away
    The true Gaza back-story that the Israelis aren’t telling this week

    The true Gaza back-story that the Israelis aren’t telling this week

    A future Palestine state will have no borders and be an enclave within Israel, surrounded on all sides by Israeli-held territory, says Robert Fisk
    A History of the First World War in 100 Moments: The German people demand an end to the fighting

    A History of the First World War in 100 Moments

    The German people demand an end to the fighting
    New play by Oscar Wilde's grandson reveals what the Irish wit said at his trials

    New play reveals what Oscar Wilde said at trials

    For a century, what Wilde actually said at his trials was a mystery. But the recent discovery of shorthand notes changed that. Now his grandson Merlin Holland has turned them into a play
    Can scientists save the world's sea life from

    Can scientists save our sea life?

    By the end of the century, the only living things left in our oceans could be plankton and jellyfish. Alex Renton meets the scientists who are trying to turn the tide
    Richard III, Trafalgar Studios, review: Martin Freeman gives highly intelligent performance

    Richard III review

    Martin Freeman’s psychotic monarch is big on mockery but wanting in malice