Credit File
Your Credit File (some times referred to as your Credit
Report) contains lots of personal information about you
and the conduct of your finanical affairs. Your Credit File
is searched and accessed by many types of organisations
ranging from your employers to your bankers. Organisations
use the information contained on your Credit File to perform
such things as to make lending decisions, perform market
intitiatives and pricing decisions to mentionjust a few.
So what exactly is on your Credit File? Let's take look:
Electoral Roll
The Electoral Roll section of your Credit File shows the
name of your local authority, the address the local authority
holds for you or held for you in the past and the dates
you were registered at these addresses. Lending institutions
often use the Electoral Roll to idenitify you and to verify
that you live where you say you live.
Electoral Roll’s are published annually (December)
using information provided by householders. The credit agencies
(Experian and Equifax) update their records annually after
the local authorities pass the details to them.
If after checking your Credit File you
find that you are not listed on the Electoral Roll then
the first point of call is to contact your local authority
and ask to be registered. You can also do this online by
visiting the Electoral Commission's website www.aboutmyvote.co.uk.
County Court Judgments (CCJ)
County Court Judgments (CCJs) are orders made against you
by the Courts for the failure to pay monies due to a creditor.
The credit agencies (Experian and Equifax) receive this
information from the Registry Trust, which is an independent
organisation set up by the Lord Chancellor's Office.
Unless County Court Judgments (CCJs) are paid within one
month of issue they will remain on your Credit File for
six years. If you pay the Judgment in full after one month
then you can obtain a Certificate of Satisfaction. However
the CCJ will remain on your Credit File but will show as
‘satisfied’. Whilst a satisfied CCJ is better
than an unsatisfied CCJ , even a satisfied CCJ will invariably
affect your credit rating.
CCJ’s are sometimes registered incorrectly. If after
viewing your Credit File you believe
a CCJ has been recorded against you incorrectly, then you
should contact the County Court who issued the Judgment.
You will be required to quote the case number, this can
be found on your Credit File. Once the court has corrected
the CCJ it is often left up to you to contact the Registry
Trust to inform them to contact credit agencies (Experian
and Equifax) and get them to amend their records.
You should write to the Registry Trust at; Registry Trust
Ltd 173-175 Cleveland Street, London W1P 5PE. A small fee
is usually required.
Bankruptcy
If you have been declared bankrupt, this will also show
on your Credit File. Like a CCJ, this information will remain
on your Credit File for six years.
If after obtaining your Credit File you discover a Bankruptcy
has been registered incorrectly you should contact the Court
who issued the Order, quoting the Bankruptcy case number
which should be detailing on your Credit File.
If a Bankruptcy Order has been made against you but has
subsequently been annulled (cancelled) or discharged (settled),
you should send a copy of the Annulment Certificate or Order
of Discharge to the credit reference agencies (Experian
and Equifax) for them to amend your Credit File.
Please note that if a bankruptcy has been annulled the credit
reference agencies should completely remove the entry on
your Credit File. If Bankruptcy has been discharged, then
a record of it will remain on your Credit Report but will
be marked as Discharged.
Individual Voluntary Arrangement (IVA)
An Individual Voluntary Arrangement (IVA) was introduced
by the Insolvency Act of 1986 and was set up as an alternative
liquidity mechanism to Bankruptcy.
An IVA is an arrangement entered into between a borrower
and creditors in which the interest is frozen and a repayment
schedule is agreed. Unlike other forms of Debt Management,
an IVA is a legally binding agreement and is supervised
by a Licensed Insolvency Practitioner.
An IVA is often regarded as a more favorable option than
Bankruptcy for both the borrower and the creditors as it
provides the creditors with a realistic repayment arrangment.
If you have entered into an IVA this will also appear on
your Credit File.
Information Provided by Lending Institutions
Your Credit File holds information about credit accounts
which you have entered into in the last six years. These
may include; personal loans, bank loans, mortgages, overdrafts,
store cards, credit cards, mobile phones and other lending
agreements.
Most lenders provide information to both Experian and Equifax
on a monthly basis throughout the term (and when the account
is settled) of the credit/lending agreement. Information,
on your payment conduct are passed by lenders to Experian
and Equifax at regular intervals. Often monthly but sometimes
more frequent.
Lenders provide what is called a ‘Payment Profile’
on accounts that you have with them. This manifests itself
on your Credit File as a way of informing people and organisations
who access your Credit File as to our you conduct a lot
of your finanical affairs. For instance, are you currently
up to date with your payments, are you in arrears, have
you been in arrears previously, are you over your credit
limit or have you defaulted on any payments.
The Payment Profile aspect of your Credit File can be the
source of great contention and is often the reason consumers
are refused credit or forced to pay a higher rate of interest
or mortgages, loans and credit..
Payment Profiles show the last 12 months payment history
and are displayed by a series of numbesr; ‘0’
= the account is up to date, ‘1’ = the account
is one month in arrears, ‘2’ = two months in
arrears and so on. The last 36 months payment history is
shown as a summary. This summary will display how many times
you have been up to date or in arrears. For instance a summary
which shows 36=0 means that the account has been maintained
up to date for the last 36 months. Whereas a summary which
shows 30=0 and 1-2=4 indicates that the account was up to
date 30 times but 1-2 months in arrears four times within
the last 36 months.
If after viewing your Credit File you believe information
given to the credit reference agencies by a lending institution
is incorrect, you should first contact the lending institution
directly and ask them to contact Experian and Equifax and
correct your Credit File.
Your Credit File shows credit accounts in four main categories;
Active Account, Settled Account, Arrears Account and Defaulted
Account.
An Active Account is an account with is currently open and
still in use. Experian and Equifax retain these accounts
on your Credit File until the account is paid in full and
then a further six years.
A Settled Account is an account which has been paid in
full. Experian and Equifax retain these accounts on your
Credit Report until the account is paid in full and then
a further six years.
An Arrears Account is an account which is currently or
historically had payments missed. If your payment profile
displays a ‘1’ this means you have missed one
payment, if it displays ‘2’ this means you have
missed two payments and so on.
A Defaulted Account is an account in which the lender has
considered the agreement to be breached in relation to the
level of arrears on the account. The Default will show how
much you have defaulted for and also the date in which the
default was lodged. You can satisfy a Default however the
entry will generally remain on your Credit File for six
years.Thsi can adversly affect your credit rating.
Credit Searches
Your Credit File shows who has searched your Credit File
within the last twelve months. This is useful information
as you can sse which organisations have accessed your Credit
File.
Some lenders factor in the number of credit searches you
have had into their credit scoring and underwriting systems.
This means if you have had lots of credit searches it can
affect your ability to obtain credit with certain lenders.
Any organisation searching your Credit File must have obtained
your consent prior to doing so. This consent is sometimes
given by you over the telephone or in writing, typically,
within declaration statements on application forms.
Your Credit File will tell you who has searched your Credit
File and provide you with the date of the search.
