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No credit? - What’s on your file? |
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Lenders can use various sources of information to decide whether or not
to lend you money. If you apply for a storecard, personal loan or
catalogue account, for instance and you are refused, there may be
negative information on your credit file. Before giving you credit a
lender must be confident that you are able to repay the money they
lend.
The information about your credit history is kept on file by a ‘Credit
Reference Agency’. These agencies are licensed by the Office of Fair
Trading and their activities are monitored to ensure they are fit to
hold and keep a licence.
The three main consumer credit reference agencies in the UK are ‘Callcredit’, ‘Equifax’ and ‘Experian’.
The files that the credit reference agencies hold are about adults who
have a credit history in the UK. This information is called your
‘credit reference file’ or ‘credit report’.
Credit reference agencies get their information from lenders, from
information in the public domain such as the electoral roll.
What happens when you apply for credit?
When you apply for credit, some lenders use credit scoring to help them
decide if you are able to repay. Credit scoring is based on the
details you give on your credit application form. Details such as your
age, your job and if you own your own home are all factors which will
be taken into account.
Each lender will have its own credit scoring system and will decide how
many points to give to each piece of information. Each lender will
also decide how many points you need to reach its own ‘pass mark’. If
you score above the pass mark then you are more likely to be offered
credit, if you score below the pass mark then you will in all
probability be refused.
What happens if you are refused credit?
If a lender refuses to offer you credit after you have made an
application for credit then you can ask the lender to explain the main
reasons why they have come to this decision. The lender may be
relying on information on your credit file which is negative so it is
important to ascertain the reason for refusal if at all possible.
Lenders also have a responsibility not to offer credit to people who
may not be able to afford it. So even if you currently repay all you
existing credit accounts on time, a lender may not want to overburden
you with more.
Lenders do not have to give you information on how their credit scoring
works so you may not know the whole reason for their refusal. You may
be able to ask the lender to review their decision or your credit score
but the decision to lend you money or not will still remain with the
lender.
How do I find out what on my credit record?
You can obtain a copy of your credit record by simply writing to any of
the credit reference agencies in the UK and asking for a copy. There
is a charge of £2.00 for each credit reference agency you contact. By
law, the credit reference agency must respond to you within 7 working
days.
Your request should be in writing and include the following information:
• Your full name – also give any names you used to be known by, such as a maiden name.
• Your full address, including post code
• Any addresses you have lived at over the past six years
• Your date of birth and
• A cheque/postal order for £2.00 made payable to the credit reference agency.
You should keep a copy of this letter and you may want to send it recorded delivery to registered post.
A credit reference agency may still require further information from
you before they can send you your file. This may be proof of your name
and address such as a copy of a recent utility bill. This is to
ensure that no one else gets your file by mistake or to check that no
one else has fraudulently applied for your credit reference file.
Credit reference agencies will not send you a copy of your file until
they receive a response from you.
Some credit reference agencies may offer you other services, such as
allowing you to ask for your credit file online. The fee of £2.00 for
each report is still applicable. The main three UK credit reference
agencies can be contacted online or by telephone as follows:
www.callcredit.plc.uk - 0870 060 1414
www.equifax.co.uk - 0870 010 0583
www.experian.co.uk - 0870 241 6212
I have my credit reference file but some of the information is wrong. What should I do?
Once you have received a copy of your file and you find that some of
the information is wrong or out of date you should write to the credit
reference agency. As well as stating your personal details again and
any reference number on your file you should also state in your letter:
• A clear explanation of what information you think is wrong and why.
• Provide any proof you have to show why the information is wrong
e.g if you have paid a debt which was previously taken to court, then
provide proof of payment.
Again keep a copy of any letters you send. By law the agency must respond to you within 28 days of your letter if it has:
• Removed the entry from your file;
• Amended the entry; or
• Taken no action.
If the entry is amended then you should receive a copy of this for your
information. Keep this safe for future reference along with all other
correspondence.
If you feel that the information is still wrong or you do not get a
response to your request you may contact the Information Commissioner
Office on 08456 306060.
Further advice on how to contact a credit reference agency can be
obtained from Consumer Direct Scotland on 08454 04 05 06 or by logging
on to website: www.consumerdirect.gov.uk
Alternatively you can visit or write to:
Highland Trading Standards
38 Harbour Road
Inverness
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