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Currently there are 3 recognised Credit Reference Companies (CRAs).
They are, Call Credit, Equifax and Experian.
These companies are profit making organisations and not (as is commonly understood) government sponsored or state controlled institutions.
They have directors and shareholders and strive to make money the same as any other company but in their case, they make money by offering other companies an opinion on how likely you are to pay your bills.
Every year (or when you move house) you fill in an Electoral Roll form confirming your name and address. This information is gathered by your local council and is the base on which all the other information sits.
Once the CRAs have purchased your name and address, they purchase any Judgements held against you from the Registry Trust.
These are the IVAs, Bankruptcies and County Court Judgements (CCJs) you may be aware of, or be unlucky enough to have experienced.
The CRAs also make deals with banks, building societies, credit card companies, even utility and mobile phone companies to gather information on your credit activity.
This information could include; how much you owe, what terms have been agreed, whether you are on time with your payments or if you are falling behind.
Companies search the CRAs database for information on you and your credit history and then based on that information decide whether you are a safe bet to offer credit terms to.
No! There is no such thing as a black list.
In fact all the CRAs do is provide the information on you that they have gathered (see ‘What Information is Held?’) to the credit company and it is the company that make the decision whether to offer credit or not.
Most Companies use a points system based on your circumstances, credit history, age, marital status, etc.
They take the information from the CRA and either use the CRA’s formula or use one of their own.
They will generally have 3 bands, a definite accept, a definite fail and a referral band where they might need more information or need to look closer at your circumstances.
Each company will have its own banding system and its own way of assessing your score.
Some companies will have a very high requirement where others will have a more relaxed approach so you will often find that even if you fail to meet the requirement with a particular company, you receive the same service from another company with no problems.
Unfortunately the company has no legal obligation to explain why you have been refused however, most sign up to the industry’s ‘Guide to Credit Scoring’ which obliges them to offer a general but not specific reason for their decision.
There is also a right of appeal that can be pursued if you are refused but ultimately the decision is at the company’s discretion.
Is the information held on
me accurate?
It is in everybody’s interest (especially yours) to ensure that the information held on you is as accurate as it can be. But, as with all organisations, mistakes can happen and if they do it can affect your way of life.
If you believe any information held on you is inaccurate you can apply for a copy of your credit files from each CRA. The statutory charge for your file is £2 and you will receive your file within 7 days.
Once you have your file check it thoroughly and if you believe any of the information is incorrect then you can write to the CRA and ask for the entry to be changed. You will need to explain why the information is incorrect and provide any evidence you have to support your claim.
The CRA has 28 days to act on your information and during this time your file will be marked as ‘disputed’. Any company looking at your information during this period can then see that the information provided could be unreliable.
The CRA will look at the evidence provided and decide whether a correction to your file should be made. If they decide not to make a correction you can send them a ‘notice of correction’. This is your opportunity to explain what you think is incorrect and/or highlight any mitigating circumstances surrounding the situation.
For example you may have been made redundant for a time that meant you had difficulty meeting your financial obligations for a short period.
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