Banks and building societies rely almost entirely upon data from major credit agencies, when credit scoring applicants for loans and mortgages. The ‘lazy’ approach is being blamed for thousands of consumers with a good credit record, being declined credit owing to administrative errors on a credit report. If a credit report shows you up as having a poor score, you will almost certainly be declined for credit on the best rates and may have to opt for much higher interest rates on any loans or credit cards, or alternatively may be unable to get credit at all.
In a case covered on the Times Online recently, an investment banker and his wife were declined for a mortgage on what they described as their ‘dream property’ owing to flawed information from credit agency, Experian. As neither of the two had a history of bad credit, they were somewhat disappointed and disputed the credit information. Although credit agencies are able to rectify errors within 24 hours when receiving notification from the banks and building societies themselves, they responded to the couple by telling them they would look into the matter within 30 days. This eventually cost them the home they wanted to buy.
So what should you do if you believe there is an error on your credit report? Well, the first thing to do is to immediately ask to see a copy of the information, which is available to you at only the cost of a small administrative fee. This will give you the opportunity to find out exactly what is causing the problem. If the issue is something you do not believe is accurate, you should write to the credit agency and officially dispute it, providing all and any information you can. Credit agencies are obliged to respond to all queries and investigate thoroughly.