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.

PROMOTED VIDEO
Finacial products from our partners
Property search
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

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

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Recruitment Genius: Compliance Assistant

    £13000 per annum: Recruitment Genius: This Pension Specialist was established ...

    Ashdown Group: Market Research Executive

    £23000 - £26000 per annum + Benefits: Ashdown Group: Market Research Executive...

    Recruitment Genius: Technical Report Writer

    £25000 - £35000 per annum: Recruitment Genius: A Technical Report Writer is re...

    MBDA UK Ltd: Indirect Procurement Category Manager

    Competitive salary & benefits!: MBDA UK Ltd: MBDA UK LTD Indirect Procurement...

    Day In a Page

    Isis hostage crisis: Militant group stands strong as its numerous enemies fail to find a common plan to defeat it

    Isis stands strong as its numerous enemies fail to find a common plan to defeat it

    The jihadis are being squeezed militarily and economically, but there is no sign of an implosion, says Patrick Cockburn
    Virtual reality thrusts viewers into the frontline of global events - and puts film-goers at the heart of the action

    Virtual reality: Seeing is believing

    Virtual reality thrusts viewers into the frontline of global events - and puts film-goers at the heart of the action
    Homeless Veterans appeal: MP says Coalition ‘not doing enough’

    Homeless Veterans appeal

    MP says Coalition ‘not doing enough’ to help
    Larry David, Steve Coogan and other comedians share stories of depression in new documentary

    Comedians share stories of depression

    The director of the new documentary, Kevin Pollak, tells Jessica Barrett how he got them to talk
    Has The Archers lost the plot with it's spicy storylines?

    Has The Archers lost the plot?

    A growing number of listeners are voicing their discontent over the rural soap's spicy storylines; so loudly that even the BBC's director-general seems worried, says Simon Kelner
    English Heritage adds 14 post-war office buildings to its protected lists

    14 office buildings added to protected lists

    Christopher Beanland explores the underrated appeal of these palaces of pen-pushing
    Human skull discovery in Israel proves humans lived side-by-side with Neanderthals

    Human skull discovery in Israel proves humans lived side-by-side with Neanderthals

    Scientists unearthed the cranial fragments from Manot Cave in West Galilee
    World War Z author Max Brooks honours WW1's Harlem Hellfighters in new graphic novel

    Max Brooks honours Harlem Hellfighters

    The author talks about race, legacy and his Will Smith film option to Tim Walker
    Why the league system no longer measures up

    League system no longer measures up

    Jon Coles, former head of standards at the Department of Education, used to be in charge of school performance rankings. He explains how he would reform the system
    Valentine's Day cards: 5 best online card shops

    Don't leave it to the petrol station: The best online card shops for Valentine's Day

    Can't find a card you like on the high street? Try one of these sites for individual, personalised options, whatever your taste
    Diego Costa: Devil in blue who upsets defences is a reminder of what Liverpool have lost

    Devil in blue Costa is a reminder of what Liverpool have lost

    The Reds are desperately missing Luis Suarez, says Ian Herbert
    Ashley Giles: 'I'll watch England – but not as a fan'

    Ashley Giles: 'I'll watch England – but not as a fan'

    Former one-day coach says he will ‘observe’ their World Cup games – but ‘won’t be jumping up and down’
    Greece elections: In times like these, the EU has far more dangerous adversaries than Syriza

    Greece elections

    In times like these, the EU has far more dangerous adversaries than Syriza, says Patrick Cockburn
    Holocaust Memorial Day: Nazi victims remembered as spectre of prejudice reappears

    Holocaust Memorial Day

    Nazi victims remembered as spectre of prejudice reappears over Europe
    Fortitude and the Arctic attraction: Our fascination with the last great wilderness

    Magnetic north

    The Arctic has always exerted a pull, from Greek myth to new thriller Fortitude. Gerard Gilbert considers what's behind our fascination with the last great wilderness