Credit Reference Agencies

What is a credit reference agency?

Credit reference agencies hold information on the details of credit agreements, arrears on credit , County Court Judgments and electoral role information. A lender can only pass on information relating to details of credit agreements and, arrears on credit if they have already notified you that they may do this. (This notification is usually included on the credit agreement). Failure to do this by the lender is a breach of the Data Protection Act.

County Court Judgments will automatically be registered and are kept on record for a period of six years.

Credit reference agencies provide factual information with your consent, so that a company can make a decision about whether to lend you money. They do not have a "blacklist" of people who should not be given credit.

Credit Scoring

When being considered for credit a lender may also take into account factors such as your age, occupation and whether you are a homeowner. They will also take into account whether you are on the electoral register. This may be an important part of the lender deciding whether to give you credit

From 16/2/01 you can apply to go on the Electoral Register at any time of the year. Contact your local council for further assistance.

The lender may give points to each piece of information they have and then add them up to give you a credit score. If you do not score above the particular company's pass level then you may well be turned down. The score might take into account the credit reference information. Each lender has their own policy guidelines which they follow when making lending decisions.

Every time you apply for credit a 'search' by the lender is marked on your credit file. Searches stay on your file for different times depending on which credit reference agency was used.

Ask the lender if they are using a credit score to decide whether to give you credit. If the company uses a computerised system, you should be given broad information about how credit scoring works and the type of things they have taken into account in the scoring system for that company. If you are turned down they should tell you if you didn't "pass". They should also tell you if you were turned down for any another reason such as because of information on your credit file. If the decision was made solely using a computerised scoring system you can ask the lender to look at your application again. This review should be done manually and not using an automatic system. You may have to supply extra information to support your application.

What Do I Do If I Have Been Refused Credit?

If you have been refused credit, then you should ask the lender which credit reference agency was consulted and whether the credit reference agency information was the reason for the decision. You can write to this agency enclosing £2.00 and ask for a copy of your file. They will require your name and address and any previous addresses that you have lived at for the past six years. If the information is incorrect then you have a right to ask the agency to remove or correct the information.

There are now three main credit reference agencies called Experian (formerly CCN), Equifax and Callcredit plc. You should check information held by all these agencies as some information may be different.

These are the addresses to write to:

Experian Ltd
Consumer Help Service
PO Box 8000
Nottingham, NG1 5GX
www.experian.co.uk

Equifax Plc
Credit File Advice Service
PO Box 3001
Glasgow, G81 2DT
www.equifax.co.uk

Callcredit plc
Consumer Services Dept
Park Row House
19-20 Park Row
Leeds, LS1 5FJ
www.callcredit.co.uk

Can I Appeal Against A Lender Refusing Me Credit?

Unfortunately, there is no automatic right to credit. Some companies are beginning to provide details as to why you have been turned down which can help you establish the reasons. If credit scoring was used then the company should give you broad reasons for refusing you credit. Also you may be able to ask for a manual decision if the initial decision was made by computer. See the section on "Credit Scoring". However, you are still only legally entitled to receive the name of the specific credit reference agency the lender consulted. You can always contact the company again if you have corrected your credit reference file of any errors and ask them to look at your application again. Otherwise, it may be a case of shopping around for credit, making sure you are very careful to check the interest rates and terms of any loan.

Be careful: every time you make an actual application for credit a "search" will show up on your credit file. It can work against you if lots of "searches" show up on your file.

Can I Ask For Information To Be Removed From My File?

The agency will leave the information on your file for at least six years. Information held by agencies include:-

Credit accounts "in default". These details are deleted after 6 years from the date of default.

Settled accounts: These are deleted 6 years from the date the account is settled or the last payment made unless a "default" was registered.

This should mean even if you settle a debt nearly 6 years after a default, the debt will be removed from your file 6 years from the date you defaulted.

Bankruptcy Orders: These are usually deleted 6 years from the date of the Bankruptcy Order but may be kept on file for longer.
County Court Judgments: These are deleted after 6 years from the date of Judgment.

Details on Magistrates Court Fines or Council Tax/Community Charge debts are not kept by the credit reference agencies.

You do not have the right to have information removed if it is correct. Information on who is on the electoral roll at your address is also included. It will not be removed even if that person has left the property.

Notice Of Correction

You can ask the credit reference agency to put a notice on your file, of up to 200 words, explaining why you got into debt or why you think information on your file is misleading. You may want to explain your financial circumstances at the time and why your situation is now different. This notice will then be seen by anyone reading your file such as a lender doing a search of your credit file when you apply for credit - Most credit decisions are made by automatic means (i.e. computer). If there is a Notice of Correction on your file, your application must be referred for a manual decision (i.e a person will decide whether or not you can get credit).

Can Details Of Other Peoples Credit Be Included On My File?

Credit reference agencies should not include information concerning people with different surnames who do not live with you as part of your family when responding to a lender's enquiry. This should mean that details of credit belonging to previous occupants and third parties such as lodgers should not affect your credit rating. The exception is where there is evidence that:-

you are members of the same family;

and

you are living as part of the same household;

and

there is a financial connection between you;

Unless you have filed a Notice of Disassociation (see below).

Disassociation Notices

If there is information on your file about people who are not members of your family or you have no financial connection with, you can write to the agency to "disassociate" yourself from them, explaining your reasons. If the agency refuses to accept your notice you can ask the Information (Data Protection) Commissioner for help. The address is:-

The Office of the Information Commissioner
Complaints Dept
Wycliffe House
Water Lane
Wilmslow
Cheshire SK9 5AF

Tel: 01625 545 745
www.dataprotection.gov.uk

Register Of County Court Judgments

If you are not sure whether you have any County Court Judgments or whether the Judgments have been registered; you can make a search against your name and address. Almost all County Court Judgments are registered at the Registry of County Court Judgments. Their address is:-

The Registry of County Court Judgments
173-175 Cleveland Street
London, W1P 5PE

There is a fee of £4.50 for a postal search of the register for each name and address searched.

Paying The Judgment Off

If your County Court Judgment has been fully paid, you can ask the County Court in which the Judgment was made to provide you with a "Certificate of Satisfaction".

There is a fee payable of £10.00 (from 26th April 1999) for this and you will need to provide evidence to the Court that the full balance, including costs, has been paid (usually this would be a receipt from the company that took you to court.) Once a Certificate of Satisfaction has been issued, the court will then send it to Registry Trust who will automatically mark your entry on the register as satisfied. This will then be passed on to the credit reference agencies. The Judgment will still stay on the register for six years from the date of the Judgment. If in the meantime you have obtained a Certificate of Satisfaction this will also be shown on the file.

The entry will only be removed if:-

you pay off the debt within one month of your County Court Judgment being entered on the register;

the Judgment is "set aside" by the Court. This is only possible in very limited circumstances i.e. if you did not know about the Judgment because you did not receive the Court papers. We have a factsheet on "Setting Aside a County Court Judgment in the County Court"

Can Credit Repair Companies Help Me?

You may have heard of companies that offer to clear your credit record with credit reference agencies to allow you to apply for more credit. BE CAREFUL: you may be paying a company for something you can do yourself. Credit Repair companies charge fees and usually send you an information pack telling you how to get a copy of your credit reference file and how to clear County Court Judgments. You need to be very careful before paying a fee to a commercial company suggesting they can remove Judgments for you. If you apply to the County Court to set aside a Judgment and you do not have a real reason to do so, then you could be in trouble with the Court. We understand that the Office of Fair Trading and the Lord Chancellors Dept are investigating Credit Repair companies. If you are not happy with a Credit Repair company, complain to the local Trading Standards Department in your local Council.

You can also check out a website set up by credit reference agencies called:

www.ukcreditrepair.co.uk

which gives more information on credit repair companies and what to watch out for.

This document was provided by National Debtline