Fixing Credit Report Mistakes

By: Jennifer Lowe - Updated: 17 Sep 2012 | *Discuss

 

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The information held on your credit report and whatever information you may provide on an application for credit, is what is used by lenders to used to calculate your credit score. This score is then used to identify the risk of offering you credit.

You do not have a single credit score or rating. Each lender will use a different system for calculating your score. Equally, these lenders do not have to tell you how they calculated your score, however, you can ask for a simple explanation of how it works and why you have been refused credit.

From opening any new credit accounts to making a request for new credit, and how you generally manage your credit are all taken into account when comprising your credit history.Around one third of your credit score is determined by your payment history. To have good credit your record will show a consistent record of paying your bills on time each with little or no missed payments.

If you can't think of a reason why you have been refused credit, your first task should be to check your credit report. There are three major credit reference agencies in the UK - Experian, Equifax and CreditCheck - who keep records on all your bank accounts, credit cards, previous loans and debt history.

Start by asking each agency for a copy of your file, each of them is likely to hold slightly different information about your financial history.You can order a paper version for as little as £2, or you have the option to subscribe to each of their online services, which are a little more expensive.

Once you have the reports, go through each of them and look for any errors. Even something small like the wrong flat number or postcode could mean that your credit record is being mixed up with someone else's.

If the mistake is concerning an outstanding debt that you disagree with then you might have to take it up with the lender in question because the credit reference agency isn't likely to change your record without confirmation that the debt has been paid off.

You also have the option to add your own comments to your report. So, for instance, if you had trouble paying off a debt and missed a few payments due t unemployment or illness, then you have the chance to explain it.

Curb Your Applications

Once you have decided what type of credit you need, don't just start applying to every lender in the hope that one of them will say yes.

Each time you make an application a lender carries out a search of your credit history and leaves 'footprints' on your report which other lenders can see.

The problem with this is multiple searches indicate multiple refusals to other lenders and this will harm your credit score.

Don't be Afraid to Ask Why

If you have been turned down, you have the right to appeal to the lender's decision. So, if you filled out an application online and were refused, then pop in to your local branch and ask them to take another look, it might be that you can give them some extra information that would make them change their mind.

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