When information on your credit report is wrong

Posted by George Coburn in Credit Check on 17 November 2014 - George is a Credit Analyst at checkmyfile

One of the main benefits of keeping track of your credit file is that you are able to monitor how your accounts are being reported to future lenders. Whether the account information is correct or not, lenders are increasingly relying solely on computers to interpret your credit file and when there is incorrect information, consumers face the potential of being declined for everyone’s least favourite reason – computer says ‘no’.

So what do you do when you’ve checked your credit file and there’s information being provided by one of your lenders that you believe to be incorrect?

Contact the lender

It is a bit of an urban myth that you can simply contact the credit referencing agency and they will remove the information from your file that belongs to you. The reason for this is that all account information on your credit file, irrespective of the agency reporting it, is owned by your lenders. No amendment or removal can be completed by an agency unless the lender who owns the information provides authorisation. It also means we can’t simply remove the bits we just don’t like.

This means that it is usually best to have incorrect information fixed at its source. The lender may need to investigate the circumstances surrounding the disputed information and by working with the lender you can provide your side of a story as to why the information should be amended. One example may be a payment being missed due to a Direct Debit not being set up correctly. The lender would have to see whether the late/missed payment on your credit file resulted in a mistake by themselves or the customer. If it wasn’t the customer’s fault, then the lender should be able to remove the late payment marker from the person’s credit file.

Lenders will usually have procedures in place for when people question why their accounts aren’t being reported correctly so it is normally best to follow these. If you’re not happy with a lender’s decision, they would be able to advise you on how to escalate your dispute.

Information is provided to the credit referencing agencies typically on a monthly basis. Once received, the agencies then need to apply the updates to the information they report. This means an amendment by a lender usually takes between 4 and 6 weeks to be reported by the agencies but in a worst case scenario could take 2 months.

Contact the credit referencing agencies

When you have exhausted all avenues with a lender, you can raise a dispute with the relevant credit referencing agency.

They would then contact your lender’s department responsible for reporting to the agency and request it validates the information on your file. As this involves two companies corresponding with each other, there can be quite substantial delays with queues on both ends. Your lender would then get back in touch with the agency and either confirm the entry on your file is correct or the agency will amend it as per your lender’s instructions.

Often a note is added to your file during the dispute called a ‘Notice of Dispute’ which will inform lenders you are disputing information on your file. These can potentially hold up future applications as a lender is forced to read the message, meaning that the search can’t be completed automatically.

Contacting the agencies may also be appropriate if there is information you believe that doesn’t belong to you on your credit file. If it doesn’t belong to you, you may find you aren’t able to dispute it with the lender responsible for reporting it, as it could be an agency error confusing personal details.

Notice of Corrections

If you haven’t been able to remove information from your file or it was found to be correct, you are able to put a short note, known as a Notice of Correction, on your file.

Putting a note on your file should only be done if you believe it is essential and we generally advise not doing it as they tend to draw unnecessary attention to negative information to your file. A lender also has to read the note before they can complete the credit check, meaning it can’t be completed automatically. In addition, it sometimes isn’t possible for a lender to differentiate between a genuine reason and an excuse, so in our experience normally take the worst case view.

For this reason, we advise people to consider very carefully whether it is really worth adding a Notice of Correction.

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