Learn to be a Financial Hunter - Not the Hunted

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How To Audit Your Credit File
Step 3: Correct mistakes, errors and missing information
The CRAs and the banks you have credit agreements with won't check your Credit File for accuracy and so won't know if there any mistakes. Therefore it's up to you.

This point highlights the saying - nobody gets a good credit score, you have to earn one. Yes, sometimes the work can be a drag but if you're not willing to put the effort in it's probable your credit file will never be as clean or as strong as it could be.... 

There are 2 kinds of errors/mistakes that can be made on your credit file -

  • Personal information - this can easily be corrected yourself. Examples would be a misspelled name or address
  • Financial information - this can normally only be changed by the bank or finance company who it relates to
Be efficient - Call customer services to get guidance
If you spot a mistake or error it's a good idea to first call the CRAs customer helpline and ask them what to do. I've used Experian in the past and their helpline was good. Customer support is free for any CRA as long as you've bought your credit file through them.
How to correct personal information 
Call the CRA and chances are they'll advise the following -
  • Write to them giving your full name and address as well as your credit file reference number
  • Clearly explain what information you think is wrong and why
  • Provide any proof you have to show why this information is wrong
  • Keep a copy of all letters you send
  • By law the CRA must tell you within 28 days of your letter if it has -
  • Removed the entry from your file
  • Amended the entry, or
  • Taken no action
  • If the entry is amended, the CRA will send you a copy of the amended entry
  • The CRA will also send the corrected details to any lender that has searched your credit file in the last 6 months
How to correct financial information if relating to a bank/finance company
If you spot incorrect information that relates to a bank or finance firm, perhaps your file is still showing a £1,000 negative credit card balance which was paid off 5 months ago, you can't request for the CRA to change the information. 

The bank or finance company is the only one who can do this so it's best to write to them before you contact the CRA. Assuming the bank agrees to correct the problem or error they will then inform the CRA and your file will get updated. If you write to the lender, do the following -

  • Give your full name and address as well as any relevant account numbers
  • Explain why you think the information is wrong, and why
  • Provide any proof to show the lender why the information is wrong
  • Keep a copy of all letters you send
How to deal with potential Customer Service Problems
Sadly, many of the banks' customer service departments often leave a lot to be desired. For example, one very unhelpful tactic they often use is to first ignore any letter you send them.

But you can't fix a credit file by being ignored so you must persevere to get a satisfactory answer. Business etiquette suggests all customer correspondence should be replied to within 28 days.

So if I wrote and hadn't received a reply within the 28 day time period I'd do the following -

  • Write again, be polite, enclose a copy of the original letter and ask for a reply within 7 days
  • If they still ignored me after a week I'd change tactics
  • I'd write directly to the CEO (find their name via Google) - apologise for writing to him but explain  that his company's customer service department has been ignoring me for 5 weeks
  • Do that and you should get a reply within a week plus your credit file problem should get sorted out quickly
Mistakes have to be corrected with each CRA
Mistakes and errors on your credit file are not automatically corrected by each of the 3 different Credit Reporting Agencies (CRAs). You must therefore notify (normally by letter) all 3 when sorting out any mistakes. 

Yes, this can be time consuming but the good news is that once this audit is done, it will not need to be repeated.  I would however suggest that you download your file once per year (January is a good time) to check everything is in order. Some people though do this 2-3 times a year but unless you're applying for large amounts of credit I don't think this is necessary.

Important: What is a 'Notices of Correction' - Why I think they're a waste of time
If there's a problem on your credit file that you haven't been able to clear up there's a facility called a 'Notice of Correction' which you can use. As its name suggests it's a note that appears on your credit file to explain the problem.
  • You're allowed to use a maximum of 200 words and it will be seen by anyone that looks at your credit file
  • The notice should clearly and accurately explain why you think an entry on your credit file is wrong
  • If the CRA thinks your notice of correction is incorrect, defamatory or scandalous, it will pass it to the Information Commissioners Office who will make judgement
So why do I think a notice of correction is mostly a waste of time -
  1. Most credit files are read by a computer which in turn calculates your credit score, and a computer won't read or even be able to understand what's written
  2. Also, if the Notice relates to a problem with a loan or debt nobody in the hard edged world of money is going to believe the story or take any notice (even if it's true)

Here's an example of a Notice of Correction -

I would like it to be known that the judgement recorded against me for £700 relates to a bill which I was unable to pay because I was made redundant in March 2009. I settled the account in full as soon as I got a new job 7 months later. I would ask anyone searching this file to take these facts into account.

Sadly, the fact is this - the person broke an official credit agreement and the reason why is irrelevant.  

Summary - By all means add a Notice of Correction to personal information that you haven't been able to correct but if the note relates to a missed payment or problem with a loan/credit agreement then no lender is likely to take any notice.

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