Article by Sam Griffin - 24th March 2020

A Guide To Financial Associations

It's not uncommon for someone checking their Credit Report for the first time to notice information that’s out of date or simply inaccurate – but by far one of the most frequent offenders for this is the record of a Financial Association.

Financial Associations often need to be removed from a Credit Report following a divorce, but there are many reasons why you might need to disassociate. Find out exactly what Financial Associations are, what they mean for you, and what you can do about them.

What is a Financial Association and can it affect my finances?

A Financial Association is an individual with whom you’ve had a real or perceived financial relationship, such as a partner or family member. Such financial connections are most commonly created when you take out credit with another person – for example a mortgage or more recently, a guarantor loan. It doesn’t even require you to open the account for an association to be created - simply making an application is enough.

Financial Associations can also be created through accounts and applications that you might not immediately think of. For example, many people find themselves financially associated to ex-flatmates or partners through being jointly named on utility accounts such as gas and electricity.

A Financial Association will subsequently be created and shown on your Credit Report, where it will remain indefinitely, even after the account is settled or closed. This means that unless you specifically request that the record of your associate be removed, your ex-partner’s finances could still be affecting your Credit Report and creditworthiness without you even realising.

A Financial Association will only be created if you’ve applied for, or held a joint account, or are both named as account holders. Marriage, sharing a residence, or any other non-financial connection are not themselves enough for Financial Association to be made.

What effect does a financial associate have on my credit report?

While you are financially associated with someone else, their Credit Report can affect your own credit applications and vice versa, so it’s important to know who you are financially associated with.

That said, you will not be able to see any information relating to your Financial Association’s Credit Report – their Credit Report is private, just as yours is to them.

Your Credit Report will have a dedicated Financial Associations section, which details those individuals you are linked with. You’ll see their name, which Credit Reference Agency recorded the link between you, and which lender created the link originally. This will be the extent of the information available to you, but any lenders you apply with will be able to see a lot more.

Lenders, mobile phone providers, utility suppliers, and almost any organisation that might perform a credit check on you will be able to see both your complete Credit Report and your financial associate’s Credit Report. These organisations will assess your information alongside the financial standing of your Financial Associations when deciding whether or not to accept you as a customer. This means any negative information on your associate’s Credit Report, such as late payments, defaults, CCJs, or bankruptcies, can potentially curtail your application.

Lenders do this to make sure anyone they consider you to have close monetary ties with isn’t likely to rely on your financial support should they have trouble making their own payments. This also means that having a Financial Association with an individual who has a high Credit Score could result in lenders viewing you more favourably, whereas a link to someone with a poor Credit Score will have the opposite effect, decreasing your own creditworthiness. For this reason, it’s important to ensure you know who you’re financially associated to as this could be the deciding factor in the interest rate you are offered, or even if you are declined outright.

As you have no way of knowing the strength of your Financial Associations’ Credit Reports, it is usually best to ensure any old links are removed, so your Credit Report is up to date and accurately reflects your current financial situation.

How can I get rid of (or dissociate) my Financial Associations?

Because Financial Associations last indefinitely on your Credit Report (until you manually request their removal), you usually have to contact each of the Credit Reference Agencies separately. Thankfully, checkmyfile makes this process a breeze, where not only can you check for Financial Associations at Equifax, Experian and TransUnion, but our team of professionally qualified Credit Analysts can help dispute and remove any link that should no longer be there.

To do this, it’s simple:

  • If you’re not already a customer, sign up with checkmyfile. In most cases, your Credit Report will be available to view instantly after passing security checks. Any Financial Associations will be clearly displayed on your Credit Report for you to see.
  • Click the ‘View’ button next to the record of the Financial Association you wish to remove and follow the instructions on screen – this will start the dissociation process.
  • We will contact the relevant Credit Reference Agencies on your behalf and let you know as soon as we hear back from them.

You can try checkmyfile free for 30 days, then for just £14.99 a month and cancel at any time.

Why might I not be able to get all financial associations removed?

Once a disassociation request has been submitted, the relevant Credit Reference Agencies will look to find an active link between you and your Financial Association. If they are unable to find a current link, they can simply remove the Financial Association. Once removed, it will no longer influence your credit applications.

If the Credit Reference Agencies do find an active link between you both, they will let you know which organisation is keeping the association current (for instance, a credit card provider that didn’t close a joint account). You’ll then know exactly which company to contact to close the account before resubmitting the disassociation request.

If you have any questions about Financial Associations or viewing your own Multi Agency Credit Report, please feel free to get in touch with our team of experts who will be more than happy to help.

Updated 24 March 2020 by Sam Griffin

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