As poor old Zoe Slater found out (Eastenders, BBC ONE), it is not always easy to borrow the money you need to put a good idea into practice. In some ways, Zoe was lucky – at least she got to speak to someone. Normally, credit decisions are made by computers without us knowing anything about it.
Every time we try to borrow money – whether it is applying for a credit card, asking for easy payments on that wide-screen TV, taking a bank loan, or getting a mortgage – our credit history is checked through one of two agencies. Experian and Equifax store details on every aspect of our financial lives. They use publicly available information from the electoral register to check that we live where we say we do and they look at the register of court judgements for debt to see if we have had real problems.
They also get information from the companies which subscribe to their services. Every monthly payment on a credit or store card, a bank loan, and even a monthly mobile phone bill, are recorded – not how much but whether it is on time, late or in default. When you ask for credit, the shop or bank does an instant on-line check of all this information. Computer software says ‘yes’ or ‘no’ – or sometimes ‘maybe’ and the decision is delayed so you can provide more information and a human can look at it!
If you are refused credit you should get a copy of your credit file held by the two agencies. You can do this easily and it only costs £2 each. Once you have your file you can call the agency to explain the items on it and query them. Even a blank file with no information can count against you. If you have never borrowed money nor had a credit card, starting off can be difficult – as it was for Zoe.
If you share an address with someone of the same name, the agencies will assume you are financially linked – so a bad record by one of you can lead to a problem for the other. If that happens, ask the agency to ‘disassociate’ you and explain why. Finally, if there are particular reasons why you have been in debt, you can put a note of up to 200 words on the file which explains what went wrong – bereavement, divorce, redundancy – and what you have done to put it right.
Equifax 08705 143700
Experian 0115 934 4050
Consumer Credit Counselling Service 0800 138 1111
National Debtline 0808 808 4000
16 February 2002
e-mail Paul Lewis on paul@paullewis.co.uk