Wednesday, August 02, 2006
She's just telling me there is an "Ask Jill" column on the Experian website.
Some of you were asking for contact details for the 3 credit reference agencies - just follow these links for Experian, Equifax and CallCredit.
The blog is now closed. Thank you for your questions here, by text and on the Breakfast website.Declan.
Sources of information
Anon (by text): Where do credit reference companies get their information without your consent?
The information is only held with a consumer's consent. When you apply for credit you give the lender permission to do a credit check and to provide information about any subsequent account to the credit reference agency. It's very important when taking out credit to read every document you sign. You'll find the consent about credit checking close to the place where you sign on most application forms.
Isn't this just hidden away in the small print?
No. It's usually in medium print and even if it was in the small print people really should read everything they sign.
A number of viewers have asked this - can the information you hold be used for anything else?
No. The information is used as part of the credit granting process. It is strictly ring-fenced and cannot be used for marketing or any other purpose.
Repairing your credit
There are various documents available on the internet that detail how to "repair your credit rating". Do these guides really work, can you repair your credit?
Don't be tempted to pay a company which offers to repair your credit. If anything is wrong on your credit report you can amend it for free. If you have money difficulties you can get free help from Citizens' Advice and other agencies who will help you sort yourself out.
If the facts on your credit report are accurate you cannot change them. What you can do is add a note to your credit report explaining any special circumstances that led to you getting into difficulties.
Upon clearing personal arrears, I understand that you are able to contact yourselves and ask for the information to be amended or removed (?). How, if possible, would someone go about removing a CCJ from the record?
If you have paid the CCJ (County Court Judgement) within one month it will not appear on your credit report. If you have taken longer to clear the debt, then the CCJ will stay on the record for six years from the date of the judgment. If you pay off the debt go back to the court with proof of payment and all the records will be updated to show the CCJ as satisfied, which will mean that potential lenders will view the CCJ as less serious than if you had left it unpaid. It will automatically fall off your report after 6 years.
Jill said that if you believe a company has posted incorrect information on your credit file and you can't get the company to correct it - that they'll put a note on your account saying you dispute the information. How much use is this? Will banks doing credit checks really take the slightest bit of notice of your comments?
Yes. Banks and other lenders have to take note of disputes and other notes that consumers can add to their credit reports. If there is a dispute flag on a piece of information, the credit application is referred out of any automated decision system and the lender has to make a "manual decision".
The dispute flag system was introduced with the new Data Protection Act so legislation dictates how lenders can use the information that we provide them with.
"automated decision system" - what's that?
Most lenders use computerised systems to process applications for credit. These sophisticated computers "score" each piece of information and come up with a yes/no/maybe.
So - you provide the information, the banks etc make the decision - based on your information?
Yes but they also feed into their scoring systems any information you give them that is not on your credit report, for example your job, your residential status, how much you earn etc.
I find it disgusting you make money on giving people bad credit rating.
We don't rate anyone. We simply hold some of the information that a lender will use to make a credit decision.
The viewers' complaint seems to be that they moved house, applied to go on the electoral roll, and then told Experian about it - but you said you had to wait for the council to update its records before you could update yours.
That's absolutely right. We cannot arbitrarily alter a public record. Local councils update our records every month.
Reply to Lana
I am still unable to figure out what the issue with my credit rating is. I got a mortgage without any problems but I can't get things like a mobile phone contract without having to put a deposit or even credit on furniture or store cards? So how do I figure out why I sometimes get declined credit??
If everything on your credit report looks OK you have to go back to the company that said "no" to you. Only they know the reason they've refused you credit. It could be something to do with the information that you've provided on your application form, for example you may not earn enough.
Reply to anon on bankruptcy
The record of the bankruptcy stays on your credit report for 6 years from the date of the order. If it has been discharged this will show but the actual record won't fall off until 6 years has passed.
Reply to Andy & Helen
If there's a problem with the electoral roll information on your credit report we will contact your local council for you but if they insist that the address is correct, there's not a lot we can do.
Jill's reply to "Credit Errors"
If you find a mistake on your credit report get back to the credit reference agency. Someone there will contact the organisation that provided the inaccurate information. If it really is wrong it's easy to get it put right. Nobody has any interest in holding inaccurate information. Lenders are basing business decisions on this information and they want it to be correct if the same way as the consumers wants.
The credit reference agency doesn't own the information it holds; the database consists of information owned by lenders. It's there so that they can share details of their customers' credit accounts to help them make responsible as well as profitable lending decisions. We have to get back to them to make sure that they update or amend their records at the same time we do ours.
When there is a query, what's your first assumption - that the customer's complaint is genuine, or that it could be someone trying it on?
Our consumer help service's mission statement says they are a "consumer champion". We do all we can, not only to put errors right, but also to explain the information on the credit report. Most people who contact us just want the information explaining.
More on addresses
I have just moved and can't get credit due to a succession of previous debtors at this address. How do I rectify this?
The previous occupants will have had no effect on your application for credit. I can't tell you why you've been refused and your credit report won't show you either. You have to go back to the lender you applied to and ask them. They are obliged under the Banking Code to give you the principle reason.
So what could it be?
The more likely reason is that you are not registered on the electoral roll which means lenders can't verify your name and address.
But someone must have said something to the viewer about previous occupants ...
Anyone who tells you that previous occupants can affect your credit worthiness are just repeating an urban myth. It's not true.
Andy, North Yorks:
My local council got my address wrong on the electoral roll and now I can't get credit.
Helen, Dorking in Surrey:
I checked my credit record. I discovered 42 mistakes. Experian corrected some but not all of the mistakes - citing that they were going off the electoral roll and that I'd have to be responsible for taking up the matter with the council.
A catalogue posted a credit as a debit in error. It was still there 3 years later, despite using a solicitor.
Anon by text:
I have been refused several credit checks at university. It was initially because my name was incorrect.
Anon by text:
I was discharged from bankruptcy in 2004 but credit reference agencies still have the bankruptcy active.
Oops - BBC Errors
Never mind about mistakes on credit reports - I've just noticed we've given the wrong web address on the screen.
Of course, you'll know that already if you've made it to this page.
Apologies for making your morning more difficult.
Tarts for Breakfast
I'm a credit card tart and now I've got 6 credit cards with a zero balance. Will this affect my credit rating?
It might do. Lenders are under a great deal of pressure to lend responsibly. They will look at what credit is available to you and if they think more would make you over-committed they might say no.
But does the number of cards matter - as opposed to the amount you've borrowed?
Both can be important. There's no hard and fast rule. It depends entirely on the lending policy of the company you apply to.
Oh - if you're not using the cards, you should close the accounts.
Return to sender
Declan you are incorrect. Previous bad debt at an address does not affect an individual getting credit unless there is a financial link.
You're only linked to someone you hold joint finances with.
Well that's me told!
Addressing the question
Why are some people refused credit just because of someone who once lived in the same property had bad debts?
They're not. Your application for credit is not linked to anyone else except your partner if you have joint credit or a joint bank account. The people who lived at your address before you can have absolutely no effect on your credit worthiness.
Is this a great urban myth? I hear people say it over and over again - that your credit worthiness can be hurt by previous occupants.
Yes it's a myth. When people are refused credit they desperately want to know why. Only the lender who has turned down the application can tell them. Very often it can be because you are not registered to vote on the electoral roll. This is the most common reason for people who have just moved house but because they're not aware of this they often assume that the past occupants are affecting them.
So you could have a whole year - the electoral roll is only updated once a year - where you can't get credit if you've just moved?
No. In the UK we now have a rolling register. Our records at Experian are updated every month. As soon as you move house, let your local council know. Lenders use the electoral roll to check that you live where you say you live.
Advise, not decide
Is the credit report that you and the other companies produce the same as your credit rating?
Your credit report is not your credit rating. Each application for credit is "rated" or "scored" by the lender you apply to. They will take into account the information on your credit report but also look carefully at the information you give them on your application. Information about your job, your salary, your residential status is not held on your credit report.
So if you are turned down for credit - who makes that decision?
The lender always makes the decision.
Let's tackle some of the questions from yesterday.
Anon (by text):
How do you find out your credit rating?
You can get a copy of your credit report from any one of the 3 credit reference agencies (Experian, Equifax and CallCredit) but each one will probably be slightly different. It costs £2. You can apply online, by phone or in writing.
Or you can take the free trial of "CreditExpert" but remember to cancel your subscription to the monitoring service if all you want is the free report (it costs £5.99 a month for instant online access to your credit report which lets you know every time there is a significant change).
We got such a strong response to our item on credit checking we've decided to spend another morning on the issue.
To answer your questions about it, we've invited in Jill Stevens, a director at Experian - one of the three credit reference companies.
Banks, credit card companies, mobile phone firms, high street stores - even car dealers - all check out our credit rating before they decide to give us loans or credit.
Credit checks also help decide how much interest we pay on those loans.
The checks are carried out by three major credit reference companies. They keep all manner of sensitive information about us on their files.
They record how good we are at paying back debts, if there are court judgments against us, and if we've been bankrupt in the last six years.
But it's claimed that one in three people have errors on their credit file.
So how do they get this information? Why do they need it? What do they do with it? And how do we fix it if it's wrong?
We'll answer your questions on air at 0645 and 0745 this morning. Text us on 83981, or message us through the Breakfast website.
And in between those times, we'll answer some more on this blog. Just add your comments here.