This is the process by which a bank or other financial institution will decide whether you are someone they wish to have as a client.
A Credit Reference provides information on your financial status. Some banks carry out a check every time there is a significant change in the nature of your account, or when new services are requested - like additional accounts or credit cards.
Credit references can be wrong for a variety of reasons.
It takes time for information to be included or removed from your record, and changes in your financial status - or changes in your address - can affect your credit check.
Another member of your family, another occupant of a block of flats, or a prior occupant of your house may have had a bad credit record, and your own affairs may be tainted by that fact because your address has been associated with a bad record.
EXAMPLES:
How do credit checks work?
Credit Reference Agencies give information to banks and other financial and trade institutions which is taken into account when deciding whether or not they want to do business with you.
This information will include any county court judgements, bankruptcies, previous and current credit accounts (i.e. credit cards etc.): -theoretically a complete credit profile of you as an individual, although it is important to remember that credit agencies can make mistakes.
How to check your own credit status
You can write to the Agency(ies) at any time to ask for a copy of your file.
You must send £1 (non-returnable) give your full name and address including post code. Give any other addresses you have lived at during the previous six years. (This helps the agency to trace all the information it holds about you.)
If you run a business, give its name and address too, because separate information may be held about you in your business capacity
Keep copies of any letters you write. They may be useful later if there is a disagreement about your file. The agency may ask for more details to help it identify your file. Otherwise it must send you your file within seven working days (starting with the day it receives your letter) or tell you that it holds no information about you.
A sample letter is attached at the end of these notes.
The main agencies are -
CCN Consumer Group Limited |
Equifax Europe (UK) Limited |
If you find errors If any of the information you receive in reply is incorrect, write to the agency asking it to remove or change the entry(ies) Within 28 days of your letter the agency should tell you it has removed or changed the entry(ies), or has taken no action. If you are still unhappy, go to your trading standards department who will help you.
The overall body for complaints is -
The Data Protection Registrar
Complaints Department
Wycliffe House
Water Lane
Wilmslow
Cheshire
SK9 5AF
If you are credit checked and refused
- If you are refused an account you should always ask for the reason.
Banks are not obliged to give you all their reasons, but they should indicate whether a credit reference agency has given them adverse information, or whether there is some other reason.
If you think the banks decision is wrong, ask how you can get the decision reviewed. If the reason is adverse information from a credit reference agency, you have a legal right to know its name and address.
Sample letter - asking for credit status information
To: (the agency)
Your Address Information
Date
Dear Sirs
I am writing under Section 158(1) of the Consumer Credit Act 1974. Please send me a copy of my file. I enclose a (postal order / cheque) for £1. I have lived at the above address for XX years. (If less than six years - ) I previously lived at Address 1 - Date(s) Address 2 - Date(s) etc.
I look forward to your reply within seven working days of receiving this letter.
(Yours sincerely)
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