Scotland on Sunday, July 12, 1998
LENGTH: 863 words
HEADLINE: MONEY: HOW TO CHECK YOUR CREDIT RATING: BEEN TURNED DOWN FOR A
LOAN AND SUSPECT THERE'S A MISTAKE IN YOUR DETAILS ON SOMEONE'S COMPUTER? IT'S
EASY TO MAKE SURE ..BL
BYLINE: TIM HUNTER
TOMORROW the credit reference agency Equifax will publish its regular
report on how well consumers are managing their debts. The overall figures will
suggest that British borrowers are becoming more prudent, though credit card users
are the exception to the rule with a slight rise in accounts in arrears.
It should perhaps come as no surprise that credit card debt is on the increase. Over the last 10 years the amount spent on credit cards has risen
from just over 15bn in 1987 to 55bn in 1997, and plastic now accounts for 16% by value of all high street spending. In some extreme cases, cash just is not acceptable any more - try hiring a car without a credit card in Geneva
airport and see how far you get.
In this environment it is more and more important to make sure there are
no skeletons in the cupboard of your credit history. But what if the
information held about you is wrong? What if your application for credit is turned down because a computer falsely says you have an undischarged debt?
The fear that somewhere there is a computer holding false information
about us is quite understandable. You might think, perhaps a bank manager has
written a distorted account of my debt history, or maybe a disk somewhere has the
words "This person should not be given any money" indelibly etched on its
There are probably few of us who have not had similar thoughts, and in
view of the spread and influence of computer technology on our lives such
suspicions are quite natural. Nevertheless, it is quite easy to check and, if
necessary, correct the information held about you on computer.
Firstly, there are only two companies which hold and supply information
on a person's identity and financial history. They are called Experian and
Equifax. All the information on their files is factual - there is no opinion,
hearsay, description or rumour either stored or given out to subscribers.
Only those companies which are licensed as credit providers under the Consumer Credit Act may access the information, and they may only do so
with your consent. No company may run a full check on you unless you have made
an application for finance and given permission for them to do so. This means
that if anyone else says they have obtained financial information about you,
perhaps a prospective landlord for example, they have done so illegally.
Banks, building societies, retailers and credit card companies make
millions of individual credit checks every year with both companies. You can check
your own file by writing to Experian at PO Box 8000, Nottingham, NG1 5GX, or
calling its helpline on 0115 976 8747; and to Equifax at Dept 1E, PO Box 3001,
Glasgow, G81 2DT.
You will have to pay 2 to each company to have the information sent to
you, but it costs nothing to have it corrected.
Of the 700,000 people annually who ask to check the information held
about them by Experian, fewer than 7,000 request that a change is made. Although
this is still an alarmingly high figure, according to Experian it gives an
inflated impression of errors because it includes trivial changes, like the
insertion of a comma, as well as substantive ones. Equifax receives 390,000 queries each year, with typically fewer than 100 requiring some sort of amendment.
If you have had some financial misfortune at some time in your past you cannot have the facts erased from the system, but you do get a chance to
explain what went wrong. "You can add a note to the file explaining any special circumstances if you have had a credit problem," said Jill Stevens,
consumer relations director at Experian. "If there is a note on a file the lender
must read it - it cannot do an automated credit score on that record."
It is worth noting that no other company can provide information to you about your own credit reference. One information company called Instant
Search claims to have been so inundated with calls asking for personal credit
records that it was forced to set up a telephone line to provide details of how to
check your credit record.
Unfortunately, for anyone who calls this number it costs around 5 to
receive information which you can get for nothing from public sources. "It's a
rip-off," commented Stevens. "They are charging people for information that is
available free at any trading standards office or Citizens Advice Bureau. We
ourselves have a helpline which tells people exactly what to do and we don't keep
them hanging on the telephone at 1 a minute."
In its defence, Instant Search claims that the telephone charges are a response to excessive demand from callers who want to know their credit reference. By law the company cannot either access or provide the
information, and its managing director Anthony Capstick said people could become abusive
when told to inquire elsewhere.
"People were blaming us because they perceived us as being part of the system," he said. "We would get dragged into a lengthy conversation about
this, and it was putting us out of business because we had to provide the
resources to answer the phones. As soon as we put in the premium telephone line people
were much happier."