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Credit reference mistakes are costing consumers

Sign saying 'oops'

A good credit score can make the difference between being accepted or rejected for a credit card or mortgage. But what happens when the credit reference agency makes a mistake and gives out an incorrect record?

Credit reference agencies, such as Experian or Equifax, make their living from selling on your personal information so that banks or building societies understand how much of a credit risk you are.

If you’ve missed repayments on a loan, they’ll know. If you’ve defaulted on a debt, they’ll know. If you’re on the electoral roll, they’ll know. However, research by Which? has found that almost a quarter of people who checked their credit report found an error.

So who is making sure they get it right? And what happens if you lose out when they get it wrong?

How mistakes can cost

Mistakes on credit records can lead to you losing out on a good deal. One consumer, Mrs S, applied for a new mortgage deal when her existing one came to an end. But she was rejected on the basis that she’d previously missed repayments on a loan.

She knew this wasn’t true and checked her credit record. It turned out her record contained information relating to a complete stranger! They had the same name, but different dates of birth and addresses. They had never even lived at the same address. Mrs S missed out on the mortgage as the deal was no longer available by the time the problem was cleared up.

Where’s the compensation?

At the moment there is no avenue for compensation when mistakes like this end up costing you money. Plus, if there is a mistake it can take up to two months for the record which companies see about you to be corrected.

Ok, errors occur from time to time but consumers shouldn’t have to lose out as a result. Everyone should get fair treatment when firms make mistakes with your personal information – that’s why we’re asking the Government to ensure these agencies make some changes to address these issues.

What are your experiences with credit reference agencies – have you had any problems? If so, did you find it quick and easy to get the issue resolved or did you end up losing out?

Martin says:
3 April 2021

Equifax have had my wife shown as a financial associate, both her maiden name and married name. I have never had a joint mortgage, made a joint credit application so I questioned this with Equifax who have subsequently removed my wife’s details from my credit report. What concerns me is that most probably when I applied for credit my wife’s credit file was also checked. I am in the process of asking Equifax to explain why and when this information was added to my credit file. I intend to complain to the ICO as I feel in this case Equifax have breached their obligations under the Data Protection Act and I will seek compensation

Hello Martin,

Fresh post. Good for taking positive action. I have a similar gripe. That is if I check my credit file with Equifax – why does Experian/Others get to see it. Surely if someone checked their credit file all day that’s a great thing. When u switch off the free period and then after lapses of time re-request that shows. We pay them and get reported to all agencies for checking our file. There are actually 200 credit reference agencies – so for arguments sake if they charge £3.99 to each company (as an example), how much money they generate. And it’s pointless – it does not prove you have applied for anything. If there is anything u wish to share essential you can. I have one word for you GDPR – U need to know your rights in relation to this and how consent plays a part.

Bye Friend