Free Yourself from Financial Problems



All lenders, credit card companies included, need to know that what they lend will be repaid, with interest. To satisfy themselves on this point, all traditional lenders turn to a group of agencies to provide the information they need.

Contrary to popular opinion, there is no central credit file shared by all agencies. Each agency has its own set of information files, which do not necessarily match with those held by their counterparts. Usually however, this will be the case, since agencies swap information on a regular basis. Agencies provide information relating to specific applicants, in return for a set fee per search ranging from a few pounds for enquiries about private individuals and over £100 for limited companies.

Information is usually held for up to 3 years, with CCJs being retained for 7 years, even if the debt is subsequently cleared. All information, incidentally, good and bad is deleted after the appropriate period: 3 or 7 years.

Inquirers can obtain details of information held on them. This is usually provided on a computer printout, and it should include ALL the information held about you. Typical details include your name and address, other residents at that address, how long you have resided there, possibly your date of birth, a listing of all known credit transactions, lender details relevant dates, repayment details, current status of the account and other information relating to previous borrowing.

The amount of information passed on to specific lenders varies, usually depending on the level of service they pay for. Unfortunately, you don't know which lenders subscribe to the more comprehensive information service any more than you know those who don't. If in doubt, assume your prospective lender has access to all of the information held on your file.

How to Obtain a Copy of your Credit Report

There are two ways in which you can apply for a copy of your credit report. Under the How to Obtain a Copy of your Data Protection Act, 1984, you are entitled to view any information held about you on computer disk. You can request this information at any time.

Your second legal right to information is when you have been refused credit. Here, you can apply for a copy of your report within 40 days of the refusal. The report must be provided free of charge. Outside of this period, the credit bureau will usually charge you a statutory fee of between £1 and £10, usually the latter.

Contact all of the two main agencies listed below:

Experian, Customer Help Service, PO Box 8000, Nottingham NG1 5GX

Equifax PLC, Consumer Response Centre, Department 2E, PO Box 3001, Glasgow G81 2DT

Having no credit history can sometimes be as bad as having a poor credit history. If lenders don't know you, or your ability (more so your willingness) to repay the loan, there's every chance they won't give you credit.

Fortunately, there are ways to establish a credit history - a good one. The secret is to start small, establish a minor line of credit, build a clean reputation for yourself, then go on to bigger and better things, increasing your credit rating several times over the course of future years.

One of the most effective starting points is to open a current account with a local high street bank. Build up a reputation as a good, honest, straight-talking customer. Wait six months before trying to obtain credit. During this time, make sure you keep well in with the manager and staff.

Your next step will most likely be stores. Most stores issue instant credit on presentation of a valid, current credit card.

Your first card will usually have a low credit limit, maybe just a few hundred pounds. Don't worry. In time, your level will be increased, sometimes significantly in a short period of time. Frequently, your credit limit will be automatically increased by the issuing bank. Alternatively, you can apply to have your limit reviewed and increased where appropriate. Once you have a valid credit card, with a higher credit level, you will be amazed at how easily other types of credit can be obtained!

Fortunately, there are ways to offset most problems. If the entries are incorrect or misleading, you can have them amended or removed. Forms for this purpose are available from all main credit agencies.

Removing Negative Items from Your Record

Legally, you are entitled to view the contents of your credit report and to have erroneous information corrected or removed.

First, you'll need to obtain a copy of your report. When it arrives, study is carefully, noting any errors, inaccurate or outdated information, or other items, which are untrue or misleading.

Next, write to the credit bureau concerned, pointing out all the errors, ambiguities and outdated entries. You can also have a statement of up to 100 words placed on your file to explain any negative entries to potential lenders.

Allow up to 28 days for an amended copy of your report to reach you. If you haven't received it in this time, contact the bureau again. If there's anything you are unsure about, contact the agency again. Be persistent. If you want credit in the future, time and trouble taken to rectify your report will prove a more than worthwhile exercise.

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