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If there's a stain on your name, erase it yourself: How to put right your Credit reference
Credit repair firms promise miracles if you've been wrongly rejected for a loan. But don't fork out for their services: it's easy to set the record straight
Sunday, 28 September 2008
After years of complaints from consumer groups, something is about to be done with the credit repair industry. You have probably come across an advert for these firms in magazines or newspapers, reading something like: "Do you have a County Court Judgment? Do you find it difficult to get credit? Let Shyster & Shyster repair your credit file, allowing you to borrow again".
All you have to do is part with a fee – though one sometimes set as high as several hundred pounds – and the credit repair firm will take care of everything. It will contact the big credit reference agencies – Experian, Equifax and Call Credit – and get them to amend your file, rubbing out those inconvenient county court judgments (CCJs) and loan defaults. With one bound you will be free – that's the promise. But, as you can probably guess, the reality is very different.
Put simply, these firms do nothing more than you can do yourself with very little effort and at a fraction of the cost. In short, you apply to one of the reference agencies for a copy of your credit file – the charge is £2 – and you check it to see if the entries made are right. For example, does the report say you failed to make certain repayments, when actually you did? If you find an inaccuracy then you ask the reference agency to correct the entry.
Things can get more complex when there is a case of mistaken identity or ID fraud and this has led to damage to a credit rating. But again the reference agencies can advise you as to how to go about providing proof so that this is put right.
What you can't do – regardless of whether you contact a credit repair firm or opt to go it alone – is have a CCJ expunged from your file if it has been placed there correctly. There is no magic bullet and the CCJ will have to sit on the file for six years before it disappears.
However, the credit reference agencies do allow people to add an entry explaining any mitigating circumstances surrounding the CCJ, such as you were in dispute with the firm that placed it there because of an unpaid bill. In addition, there are very simple steps you can take to boost your credit rating, such as ensuring you are on the electoral roll.
But anyone claiming that they can magically repair a credit file is simply selling snake oil. Now, from Wednesday, all credit repair firms will need a license. Those that trade without one will be committing a criminal offence and fall foul of the Consumer Credit Act, in much the same way as loan sharks.
People within the Office of Fair Trading, whose job it will be to enforce this new regime, will only allow licences to go to firms that do not make exaggerated claims over what they can do for customers – and officials tell me they have been watching adverts like the proverbial hawk.
As a result, a lot of the firms may disappear overnight this week and others may be squeezed out of existence over time, and that will be absolutely no loss at all.
Rescue us from repossessions
I'm not one for politicians (I'm sure I'm not alone in that): most of them have egos so big, they even put journalists to shame. But one politico I do have time for is the Lib Dem Treasury spokesman Vince Cable. Not only is he the teller of the best parliamentary joke I can remember (his description of Gordon Brown metamorphosing from Stalin to Mr Bean), but he has also been talking huge sense about debt and the housing market for the past five years or so.
His calls have been right all the way and he was correct again last week to urge the Government to act to protect homeowners from what is increasingly looking like a sharp rise in repossessions that could conceivably make the early 1990s look like a tea party.
Now previously I have called for banks to be stopped from taking repossession proceedings until arrears of three or, better still, six months have been reached. You may think they already wait, but debt charities tell me that, incredibly, some sub-prime lenders are moving to repossess after little more than a month.
I would also like to see strict controls over the level of arrears charges that are levied and an end to the practice of banks charging customers for outside debt advice services. It doesn't mean repossession should never happen – sometimes it can provide a break and the chance of a fresh start – but the process should be completely transparent and there should be as many opportunities for the parties to talk as possible. For the good of society, the prime objective should be to keep people in their homes.
Banks and ministers have talked a good game on this but we need action.
Credit repair firms promise miracles if you've been wrongly rejected for a loan. But don't fork out for their services: it's easy to set the record straight
Sunday, 28 September 2008
After years of complaints from consumer groups, something is about to be done with the credit repair industry. You have probably come across an advert for these firms in magazines or newspapers, reading something like: "Do you have a County Court Judgment? Do you find it difficult to get credit? Let Shyster & Shyster repair your credit file, allowing you to borrow again".
All you have to do is part with a fee – though one sometimes set as high as several hundred pounds – and the credit repair firm will take care of everything. It will contact the big credit reference agencies – Experian, Equifax and Call Credit – and get them to amend your file, rubbing out those inconvenient county court judgments (CCJs) and loan defaults. With one bound you will be free – that's the promise. But, as you can probably guess, the reality is very different.
Put simply, these firms do nothing more than you can do yourself with very little effort and at a fraction of the cost. In short, you apply to one of the reference agencies for a copy of your credit file – the charge is £2 – and you check it to see if the entries made are right. For example, does the report say you failed to make certain repayments, when actually you did? If you find an inaccuracy then you ask the reference agency to correct the entry.
Things can get more complex when there is a case of mistaken identity or ID fraud and this has led to damage to a credit rating. But again the reference agencies can advise you as to how to go about providing proof so that this is put right.
What you can't do – regardless of whether you contact a credit repair firm or opt to go it alone – is have a CCJ expunged from your file if it has been placed there correctly. There is no magic bullet and the CCJ will have to sit on the file for six years before it disappears.
However, the credit reference agencies do allow people to add an entry explaining any mitigating circumstances surrounding the CCJ, such as you were in dispute with the firm that placed it there because of an unpaid bill. In addition, there are very simple steps you can take to boost your credit rating, such as ensuring you are on the electoral roll.
But anyone claiming that they can magically repair a credit file is simply selling snake oil. Now, from Wednesday, all credit repair firms will need a license. Those that trade without one will be committing a criminal offence and fall foul of the Consumer Credit Act, in much the same way as loan sharks.
People within the Office of Fair Trading, whose job it will be to enforce this new regime, will only allow licences to go to firms that do not make exaggerated claims over what they can do for customers – and officials tell me they have been watching adverts like the proverbial hawk.
As a result, a lot of the firms may disappear overnight this week and others may be squeezed out of existence over time, and that will be absolutely no loss at all.
Rescue us from repossessions
I'm not one for politicians (I'm sure I'm not alone in that): most of them have egos so big, they even put journalists to shame. But one politico I do have time for is the Lib Dem Treasury spokesman Vince Cable. Not only is he the teller of the best parliamentary joke I can remember (his description of Gordon Brown metamorphosing from Stalin to Mr Bean), but he has also been talking huge sense about debt and the housing market for the past five years or so.
His calls have been right all the way and he was correct again last week to urge the Government to act to protect homeowners from what is increasingly looking like a sharp rise in repossessions that could conceivably make the early 1990s look like a tea party.
Now previously I have called for banks to be stopped from taking repossession proceedings until arrears of three or, better still, six months have been reached. You may think they already wait, but debt charities tell me that, incredibly, some sub-prime lenders are moving to repossess after little more than a month.
I would also like to see strict controls over the level of arrears charges that are levied and an end to the practice of banks charging customers for outside debt advice services. It doesn't mean repossession should never happen – sometimes it can provide a break and the chance of a fresh start – but the process should be completely transparent and there should be as many opportunities for the parties to talk as possible. For the good of society, the prime objective should be to keep people in their homes.
Banks and ministers have talked a good game on this but we need action.
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