How to fight back when your credit rating is wrong
We're often asked how you can fight back when a company’s error wrecks your credit rating
We’re all constantly being told how much cheap credit there is around.
Whether it’s a credit card, a personal loan, finance to buy a car or even a mortgage, the rates may be attractive, but you still have to qualify.
And, if you’ve got a bad credit rating, or a black mark against your name, you will probably be out of the running.
This can have devastating consequences, as young couple Ellen and Andrew Jones discovered when they came to remortgage their first home.
Their application was turned down flat because of bungling by Vodafone.
Ellen had a contract with the phone company that ended and, although she settled all outstanding debts, Vodafone continued to chase her for money she didn’t owe.
It was all over a measly £18. But Vodafone’s mistakes left a negative mark on Ellen’s credit file – something that was far worse than being chased for money she didn’t owe.
The problem is all too common – we receive many complaints from people who are wrongly pursued for money.
So, what can you do if you find yourself in the same position?
It seems like companies have all the power. They can make a cock up and threaten you with debt collectors when you don’t owe money, and it’s YOU who have to prove they are at fault.
And even if the matter is finally sorted, after weeks of stress and worry, the chances are all you’ll receive is an apology.
We say the regulations should be changed to make it a serious matter to pursue a customer for money they don’t owe, especially when that customer, like Ellen, long ago proved she didn’t owe it.
Meanwhile, you need to clean up your credit file, because if a black mark remains it can cause serious grief in the future.
Here's what you can do ...
Make the company admit the debt is incorrect
Number one is to get the company chasing you for the bogus debt to admit its mistake.
Many big companies have terrible track records for getting bills wrong – Vodafone is certainly one of them.
But even an admission of error may not in itself resolve the issue, as Ellen found. Faulty admin processes can mean that once debt collection processes have begun, they often take more than a phone call to stop.
Your initial contact will probably be by phone, so ask the name of the person you are talking to and make a written note of what was said and what was agreed and include the date in your note, even the time.
Demand to know exactly what you are supposed to owe. If it’s wrong, explain why and then follow up by putting this in writing.
Make what you write simple and clear.
If you have already paid the bill, provide evidence …and, once again, put it in writing following any call.
Golden Rule – put everything in writing and demand that the company you are dealing with does the same.
Check your credit rating with an agency
Of course, once step one is done, you can’t afford to leave it there.
Just because you have received an apology in writing, perhaps even a ‘good will’ payment, do not assume your credit report is unaffected.
Sign up for a free trial with a major credit agency such as Experian, and check your report.
Demand the company correct any inaccuracies
If there is info there that is wrong or out of date relating to the dispute you’ve just resolved, immediately contact the company you were in dispute with and demand they correct your credit report.
Also demand they write to you confirming they have done this.
Still unresolved? Raise a dispute
If even this does not resolve matters, then email the credit agency and explain that the report is incorrect and that the company making the negative report has confirmed it is wrong.
This is known as raising a dispute.
Provide evidence with a simple statement of the facts, known as a notice of correction.
Ask for your credit report to be changed. The agency will contact the company to confirm the details and they should confirm to you that they are doing this and the outcome.
If you are 100% in the right, this should resolve matters.
Third party arbitrators
If it doesn’t end the problem (and the credit agency won’t change the entry unless the company agrees it’s wrong) then you can still pursue matters.
You can demand the agency makes a note of your dispute next to the entry on your report and that your case is referred to a third-party arbiter.
All major credit agencies will have a process for doing this.
The important thing to remember is this: if you have been asked to pay a bill you do not owe and this pursuit has continued and not been withdrawn after the first demand, you MUST check your credit report to see if it has been affected.
And keep checking it for any inaccuracies over the following weeks.
This is the simplest way of avoiding nasty, and potentially catastrophic, consequences further down the line.