We recently moved home and have been turned down for a credit card at this address, despite having an immaculate credit record previously. Can an address be blacklisted? Is there anything we can do about it?
FK,ANDOVER
"Blacklisting" used to be a serious problem as consumers found themselves turned down for credit because of the financial misdemeanours of previous owners and tenants registered at their address.
Things have moved on, though. Equifax, Experian and Callcredit, the big three credit reference agencies that collate information about people for the loan companies, now work in a much more sophisticated way. Instead of blacklisting addresses, they follow an individual's credit trail, marrying up missed payments and defaults.
This, of course, will do little to reassure you as it suggests a problem with your own credit rating.
But James Jones, consumer education manager at Experian, says you may have nothing to worry about as moving home can cause a temporary dip in a rating. "For a start, it will take a little while for your name to appear on your council's electoral register and for the information to reach the reference agencies. Lenders use the electoral roll to check a name and address, so not being registered is likely to reduce your credit score. It also takes time for details of current loan agreements to move to your new address on your credit report."
If you continue to have problems, it is worth going back to the lender and asking why they rejected you. Checking your credit report is relatively straightforward. Mr Jones says: "A one-off printout costs £2. The agencies also offer more expensive online services which are usually available on free trials. They will give advice on improving your report and they will certainly investigate if you find any discrepancies."
Experian (
www.experian.co.uk) publishes free guides on credit refusal and moving home. Call 0800 013 0161 for copies.
I'm around 12 months into a two-year unsecured personal loan and am wondering whether I should continue with the payment protection insurance (PPI). I had kept it up because I thought the debt would be collected from my family if anything bad were to happen to me. But I have subsequently read reports that suggest this is not the case. Can you tell me which standpoint is correct?
SS, Kilburn
PPI has been one of the most controversial consumer products of recent history. The theory is fine: the insurance meets your loan repayments if you lose your job or fall ill. But in practice it has proved expensive and insurers have been shifty about paying out. One of the worst abuses outlined by consumer groups and watchdogs is that people have been persuaded they need to buy PPI as a condition of getting a loan in the first place.
A recent review by the Competition Commission found that PPI is very profitable for providers and there is little competition. The review also found it is difficult for customers to search for alternatives and switch products. To address this, the Commission proposed a 14-day "cooling off" period before the provider of the loan can sell PPI to a consumer. Despite howls of protest from banks and insurers, we can expect some action on this early next year. A fairer system is at last in sight, which, combined with the Financial Services Authority fining several big providers for widespread mis-selling of PPI, is very welcome indeed.
Nevertheless, the right insurance policy still has its place, and as the economy heads into recession, this may not be the time to do away with any protection you already have. Frances Walker of debt charity the Consumer Credit Counselling Service (CCCS), says that if you are worried you should check the details of the policy. She adds: "If you feel you were mis-sold it, complain in writing to that firm stating the reasons why. Even if you were not mis-sold the policy, you can still cancel it. Information is available on websites such as Which.co.uk and MoneySavingExpert.com. If a firm refuses to give you a refund, make a formal complaint to it and re- port it to the Financial Ombudsman."
Strictly speaking, Ms Walker adds, creditors do have a claim on your estate in the event of your death. But this does not mean they can ask your relatives to repay any debts, unless they are joint borrowers on the loan agreement or they have acted as a guarantor for the credit. So if you choose not to continue with the insurance, it is unlikely the lender will attempt to retrieve the debt from your family. However, it may reduce the value of your estate. As ever, this is a case of knowing what you have bought and making sure that it continues to meet your needs.
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My bank has been calling me persistently, trying to sell me various insurance products. This seems to have gotten worse since the start of the credit crunch and I always have to give my password details, which makes me nervous. Is there anything I can do?
AG, Norwich
There was once a blissful age when banks had not yet wised up to the potential for cross-selling. Bank statements were not accompanied by savings and insurance leaflets; your branch cashier didn't try to sell you a mortgage; and you certainly did not receive unsolicited calls on your mobile, selling the latest offers. I'm sure the banks would say they are simply making you aware of any new deals which doesn't explain why they don't tell you when you could upgrade to a better rate on your savings or a lower rate on your credit card. Brian Mairs of the British Bankers' Association says: "If a bank's calls become a nuisance, they are no use to either of you. All you need do is inform it that you no longer wish to receive these calls."
Sounds too simple to be true? Mr Mairs says it really should be that easy: "Under the Banking Code, banks and building societies make this clear commitment: 'When you become a customer, we will give you the opportunity to say that you do not want us to contact you for marketing purposes'." Please let me know if this doesn't work.
Consumers in your position should register with the Telephone Preference Service. It is a legal requirement that no organisation can make calls to numbers on the TPS unless they have your consent.
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