Credit where it's due

By HELEN LOVELESS, MAIL ON SUNDAY ENTERPRISE EDITOR
Updated:

 

PAYING for access to your credit record can highlight hidden problems. But it's what you do next that really matters.

A growing number of people are finding they have black marks on their credit file, whether as a result of previous debt problems, mistakes or even because of other people's problems.

The easiest way to check your credit history is to pay for a copy of your file from Equifax. Previously applicants had to write to agencies for more limited information, but the service is now available online. It costs £8.25 and includes details of all financial agreements taken out in your name, defaults and late payments.

If there is a problem affecting your credit history it will show up here. There are then three main ways to address this, depending on what the issue is.


Notice of Dispute
If there is something on your file that should not be there, such as a repaid debt, you can apply online for a notice of dispute. Equifax will then write to the company to double-check the information they provided was correct.

The company or supplier has 28 days to respond to Equifax. If they don't hear from them within this time then Equifax will amend the record in your favour. If the supplier agrees they were in the wrong, Equifax will also change your credit file.


Notice of Correction
This can be used if there is data on your file that you agree is true but which arose as a result of extenuating circumstances and gives a misleading impression of your present situation. For example, if you have made late payments or defaulted on an account because of a death, divorce or redundancy.

You can write up to 200 words explaining why the problem arose and why you think it should now be disregarded. This is worth doing because lenders are legally obliged to read notices of correction when they check credit files and may be more likely to take individual circumstances into account where you have explained why something happened.


Notice of Disassociation
If you live or have lived with someone who has run up debts or had credit problems then you could find your credit record affected as well. In this situation you would need to put a notice of disassociation on your file, so that any time you apply for credit your information is viewed independently from anyone else.

However, you must be able to prove you have no active financial connection. If lenders believe there is a link or they are members of your family, then they are likely to take their information into account when assessing your application.


The good news is that none of the above cost anything, yet they could make a big difference to the health of your credit record.

Even if you do have financial blemishes against your name, it no longer means a lifetime of rejection, says Neil Munroe, director of Equifax.

'There are a number of steps people can take to improve their overall credit record, particularly if they feel there errors or misrepresentations,' he says.

'Not only that but the older the financial history is the less impact it has on lenders' decisions. As long as there are clear signs you are now able to manage your finances most lenders will consider credit applications,' he added.

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