Your credit file (report) and mortgages
Credit File Information
When you make an application for a loan or a mortgage through a mortgage broker you may be credit checked. As well as looking at your financial information and bank statements they will also check your credit report with one of the major credit reference agencies, Experian or Equifax.
What is a Credit Report?
Experian and Equifax are the leading credit reference agencies in the UK. Credit reference agencies maintain information about you and your credit history. This information is gathered on an ongoing basis from many sources that have extended you credit. Lenders and broker/packages, employers, landlords, and other service providers buy that information in the form of a credit report to help them decide whether to approve your application for a loan, credit card, job, or housing, or to offer you a product or service at a particular rate. Because your credit file changes constantly, it’s important that you review your information regularly to check its accuracy.
The bulk of your credit report consists of details about credit accounts that were opened in your name or that list you as an authorised user (such as a spouse’s credit card). Account details, which are supplied by creditors with which you have an account, include the date the account was opened, the credit limit or amount of the loan, the payment terms, the balance, and a history that shows whether or not you’ve paid the account on time. Closed or inactive accounts, depending on the manner in which they were paid, stay on your report for up to 6 years from the date of their last activity. Credit reference agencies record an inquiry whenever your credit report is shown to another party, such as a lender, service provider, landlord, or insurer. Inquiries remain on your credit report for up to two years.
Public records.
Matters of public record obtained from government sources such as courts of law including County Court Judgments and bankruptcies may appear on your credit report. Most public record information stays on your credit report for 6 years.
Who Can Look at Your Credit Report?
Anyone with what is considered a permissible purpose can look at your report. These companies, groups, and individuals include:
Potential lenders
- Landlords
- Insurance companies
- Employers and potential employers (usually only with your written consent)
- Companies you allow to monitor your account for signs of identity theft
- Any government agency (although they may be allowed to view only certain portions)
- Someone who uses your credit report to provide a product or service you have requested
- Someone that has your written authorisation to obtain your credit report
Checking Your Credit Report
Many different lenders and other businesses to make decisions about you use your credit report. When it comes to your credit report, it is what you do not know that can hurt you. Credit card companies, mortgage loan companies, car loan and insurance companies, even landlords and employers check credit reports to find out about your credit past. The reason? They assume if you were responsible in the past, you will most likely be responsible in the future. When it’s time to consider any sort of financial move a new home or car, a new credit card, a new auto insurance policy, even a new job it is time to check your report.
You have the right under the Data Protection Act 1998 to obtain your credit file by post at a cost of £2.
You can do this by completing the forms below and sending them to the credit reference agencies :
Experian Credit File Application Form (PDF)
Consumer Help Service
Experian Ltd
PO Box 8000
Nottingham
NG80 7WF
Equifax Credit File Application Form (PDF)
Equifax Credit File Advice Centre
P.O. Box 1140
Bradford
BD1 5US
You can check your file online using the following sites:
All of the above agencies offer a service whereby they will charge you a fee of up to £15 for viewing your file an unlimited number of times in a 3 month period. This will give you the ability to query any entries you do not agree with and check that they have been removed or amended.When you get your report, review it carefully. If you see problems on your report, such as an unpaid bill that you simply forgot about, act right away to resolve the debt. Then ask the business to which you owed the money to send a letter to the credit reference agencies saying that the matter has been resolved. Also, make sure your report is accurate. Check for accounts you didn’t open, charges you didn’t make, and delinquencies you didn’t cause. If you see evidence of fraud, contact the credit reference agencies immediately. Explain the situation and ask that an alert be placed in your file. Also, report the fraud to the police. Your credit report will follow you throughout your life and can help you financially or hurt you. Review it carefully! Within a month of your inquiry, the credit-reporting agency should notify you of the results of its investigation. If you cannot resolve a disputed Item you have the right to attach a 200-word statement, free of charge, explaining the nature of your disagreement. Your statement will become part of your credit file, and will be included each time your credit file is accessed.
Credit Report Privacy & Your Rights
Because your credit report contains information about you that is not publicly available, it is important that you know your legal rights as a consumer to access this information. The Data Protection Act and Consumer Credit Act restrict who has access to your sensitive credit information and what uses can be made of it. The major credit reference agencies have also adopted voluntary guidelines to enhance their consumer services.
About the author
Mike Burridge is a Director of Leybridge Limited who are specialist Mortgage Brokers which specialise in adverse credit mortgages & general insurance.
