According to figures recently published by The Independent, around 10 million Brits have found errors on their credit file. Of course, this number could be far higher as most of us rarely check our files. The problem with credit file errors is you may only find out about the error upon applying for a new piece of credit. Many are finding themselves turned down for store cards, mobile phone contracts, credit cards or loans, despite always paying their credit commitments on time and in full.
How do errors happen?
Credit file errors can come in many forms. Often, the credit provider will accidentally report a payment as missed when it has in-fact been paid on time.
Sometimes though, it can be as simple as a misspelt address. This means that when a lender carries out a credit check, no credit history is found at the misspelt address and the credit score returned appears lower than it should.
Unfortunately, credit file fraud does happen. Here, individuals will use another person’s identity to take out items of credit (often a credit or store card). They will then accrue large balances on these cards without any intentions of making payment. The victim will therefore be left with defaults and high credit utilisation percentages which will affect their credit score.
How can I rectify errors?
If you have spotted or been alerted to an error on your credit file, it’s important that you get it rectified as quickly as possible.
There are a variety credit correction companies available that charge a fee to get the error rectified. These companies essentially take care of all the leg-work of getting the error removed but they’re usually very expensive.
Instead, you’ll probably want to do it yourself. To do this, your first port of call is to contact the lender or provider that the error was associated with. If the error related to a store card, get in touch with that store.
The creditor will probably request details that prove the error. This might mean printing out receipts or statements. Providing the creditor agrees that an error has been made, they will update their records. These updates will go out to the credit reference agencies that hold your credit file – be warned though, this could take up to one-month.
If the creditor disputes the error, you’ll need to raise it with the credit reference agency directly who will carry out a full investigation.
If you believe you have been the victim of identity fraud, then this is a matter for the police.
Safeguarding against errors in the future
There’s little you can do to physically stop errors from happening, instead, you should focus on catching errors as and when they happen. You can learn more about credit scores by reading our ultimate guide.
The best way to catch errors is to check your credit file on a regular basis. Fortunately, this is now much simpler than it once was.
There are a host of companies (such as Noddle) that allow you to check your file free of charge. Not only that, but they’ll email you each month to let you know that your file has been updated with your most recent credit activity.
By taking a few minutes each month to log in to your account you could save yourself a lot of time, money and stress further down the line.
Have you been the victim of a credit reporting error? How did it affect your ability to obtain further credit? We’d love to hear about your experience of getting it rectified in the comments section below.