Correcting Your Credit Rating

Most people require credit at some time, whether it is in the form of a credit card, a loan or an overdraft. However careful you are, it is possible to find yourself blacklisted for credit purposes.

When you apply for credit, the lender will apply to either Experian or Equifax, the two Credit Reference Agencies (CRAs) that provide financial data to lenders, for information to help them make a decision. CRAs hold a regularly updated database of information about consumer credit applications, court judgments and so on.

When a lender checks with a CRA, following a customer's request for credit, it is logged on that person's file. A large number of applications from one person in a short time may indicate fraud or excessive borrowing.

Under the Data Protection Act 1998 and the Consumer Credit Act 1974 you have the right to know what information about you is held by a CRA. The statutory credit reference report costs £2. You can see details of who has searched for information about you and request information as often as you wish without a record of this being seen by a lender.

If you are refused credit, the lender is not obliged to tell you why but they should tell you if information supplied by a CRA was material in the decision to refuse credit. The lender should give you the name and address of the agency.

If you think the information is inaccurate, you can make a complaint to the CRA, who must then contact their information provider. Meanwhile, your file should be marked as "disputed" so that prospective lenders realise that the information may not be reliable. Agencies have 28 days to answer complaints.

Usually, people only contact a CRA if they run into difficulties when applying for credit. However, you may wish to know what information is stored, even if you have never had any problems.

Difficulties can occur because at present lenders are allowed to take into consideration information about people with the same surname living at the same address, even if their financial affairs are completely unconnected to the individual seeking credit. For example, if you have children living at home who have debts, it could affect your own credit worthiness.

I

The contents of this article are intended for general information purposes only and shall not be deemed to be, or constitute legal advice. We cannot accept responsibility for any loss as a result of acts or omissions taken in respect of this article.

Latest News

Wife Sees Off Bankruptcy Trustees' Attempt to Sell Off Her Home Wife Sees Off Bankruptcy Trustees' Attempt to Sell Off Her Home
Lawyers Step In to Protect Negligence Victim Prey to Gambling Addiction Lawyers Step In to Protect Negligence Victim Prey to Gambling Addiction
Lasting Powers of Attorney - Why it Makes Sense to Appoint a Professional Lasting Powers of Attorney - Why it Makes Sense to Appoint a Professional
Returning Expatriate Couple Pay the Price for Brexit Returning Expatriate Couple Pay the Price for Brexit
Facing a Bank's Formal Demand for Payment? You Are Not Powerless Facing a Bank's Formal Demand for Payment? You Are Not Powerless
Cowboy Builders Can Expect Stern Punishment - Court of Appeal Ruling Cowboy Builders Can Expect Stern Punishment - Court of Appeal Ruling
Lending Money to Friends? Don't Act Without Professional Advice Lending Money to Friends? Don't Act Without Professional Advice
Homeowner Mis-Sold Solar Panels Awarded Thousands in Compensation Homeowner Mis-Sold Solar Panels Awarded Thousands in Compensation
Negligent Education - Boy Let Down by Private School Wins Compensation Negligent Education - Boy Let Down by Private School Wins Compensation
COVID-19 - Court Authorises Cessation of Father's Life-Sustaining Treatment COVID-19 - Court Authorises Cessation of Father's Life-Sustaining Treatment