Credit reference mistakes are costing consumers

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?