Some searching questions about credit reference agencies

[piemanpete]

Hi Folks.

 

My wife and I both declared ourselves bankrupt in Dec 2009 in the face of insurmountable financial problems arising from the credit crunch and subsequent downturn.

 

My wife has an IPA in place which should expire in early 2013. I was not given an IPA as I have insufficient earnings.

 

Although I am self-employed and earn very little, my wife is a senior teacher and earns >£50k. She would like a credit card with a low limit just to be able to charge things then repay the card in full each month. It's very difficult to hire a car abroad with a debit card, for instance - she has found one firm that will do it, but they will take a €600 deposit from her debit card when she collects the car. If she'd had a credit card it would just be a case of taking the card details. So that's a lot of money tied up in the deposit that cannot be used for the holiday - or anything else- and there's the risk of spurious charges being made to it on returning the car. Even the very bottom end of the credit card market won't touch her - I don't even bother asking.

 

I know our credit files look a mess because we recently had them all sent to us. As a result we posted notices of correction on all of them to explain our circumstances. We also wrote to all creditors asking them to mark our accounts as 'satisfied' wef the date of our discharge, June 2010. We asked them to confirm that this had been done. Some replied and said they had done so. One, a former secured lender, said they could only mark the account as partially satisfied as they hadn't got all their money back and some (including some big names) have not replied at all.

 

Since our bankruptcy we haven't missed a payment on any service from utilities, rent etc. In fact before we were made bankrupt our records were squeaky clean for years, but this seems to count for nothing, as do the notices of correction.

 

So I'd like to ask:

 

1. Where is it set in stone that credit records are kept for six years? I cannot see what useful purpose it serves, as by keeping bankrupts and thousands of others in purgatory it effectively removes them as contributing consumers, which must have an impact on the economic recovery, especially the housing market. I wrote in this vein to Vince Cable but was effectively fobbed off with the reply that it was up to the finance industry to decide to whom they wished to lend money. We are in our mid-50s and having lost our home will probably not be eligible for mortgage finance until 2015, by which time we will be too old to be able to afford the repay a mortgage before retirement (ha ha - what retirement?).

 

2. Where can we get impartial advice that will include looking at our credit files to check that all entries are legitimate and fair?

 

3. Should we have the notices of correction removed from our credit files as they don't seem to be doing any good?

 

4. Is anyone running a campaign to get the law changed so that credit file entries are removed in a more sensible time-frame - say three years, rather than six?

 

5. Why do credit files not contain positive information from utilities, local authorities, insurers, landlords etc so lenders can see that you are currently up to date with all accounts? They only seem to contain bad news.

 

6. The credit reference agencies insist they are just impartial recorders of information and that there is no such thing as credit blacklists, but plainly this is not true as a) they can give you a credit score and b) if your credit file looks bad then blacklisted you definitely are, because all lenders use the agencies and base their decisions on the information they hold and your credit scores.

 

Thoughts, suggestions gratefully received.

 

Thanks very much for reading this lengthy post.

[BigNee]

I have worked for both high street bank and a credit reference agency so have seen both sides, lenders only use the information from the credit reference agencies as a small part of their decision making process, a majority is their own lending criteria. As for the notice of correction remove them as they will serve no purpose now or going forward unless there were exceptional circumstances around the time you both went bankrupt, the only purpose these will serve is the computer programmed to make the decision will be stopped in its tracks and your application will possibly have to be referred. If you send off for a paper copy of your file the agencies should go through this (Impartially) with you and help you remove amend any information that is incorrect. Hope this helps a little

[piemanpete]

I have worked for both high street bank and a credit reference agency so have seen both sides, lenders only use the information from the credit reference agencies as a small part of their decision making process, a majority is their own lending criteria. As for the notice of correction remove them as they will serve no purpose now or going forward unless there were exceptional circumstances around the time you both went bankrupt, the only purpose these will serve is the computer programmed to make the decision will be stopped in its tracks and your application will possibly have to be referred. If you send off for a paper copy of your file the agencies should go through this (Impartially) with you and help you remove amend any information that is incorrect. Hope this helps a little

 

Thanks BigNee - I was beginning to wonder if anyone would respond!

 

I will write to all the agencies again and get new copies of our files to see which entries have now been marked satisfied. Do you know whether some entries may remain unsatisfied until the IPA is finished?

 

P.

[BigNee]

Some of your creditors may NOT put a satisfied marker on the accounts as full payment has not been received (due to the bankruptcy) however either way the records will be there on your file for 6 years, it may be worth also checking now if lenders can now check the full six years of history on your file as I believe this has recently changed (before it was only 3). Get a certificate of Satisfaction from the court (this will cost you) and send through to your creditors asking them to update your report with satisfied - do not let them bully you be firm. Again I hope this helps

[BigNee]

I assume also IPA should read IVA - entries for accounts in this will not show satisfied until this is completed sorry to be the bearer of bad news

[piemanpete]

I assume also IPA should read IVA - entries for accounts in this will not show satisfied until this is completed sorry to be the bearer of bad news

 

No, it's not an IVA, BigNee - I don't think that would be possible with a bankruptcy. This is an IPA - Individual Payment Agreement/Arrangement - can't remember which, whereby the debtor makes payments to creditors for three years following bankruptcy. Doesn't apply in all/many cases because many bankrupts are often unemployed so have no earnings to justify an IPA, so their debts are written off altogether. Not so in our case, unfortunately - although also fortunately that my wife has a good job that enables us to live comfortably, if frugally. The money goes to everyone's favourite solicitors, Moon Beevor, who administer the IPA on behalf of the Trustee in Bankruptcy. The payments are divvied up between the creditors, presumably in proportion to their share of the original debt.

[BigNee]

I would say then that until your wife has completed the three years of payments to her creditors they will show as unsatisfied on her report - your wife will need to make sure this has been completed correctly on her report also

[piemanpete]

I would say then that until your wife has completed the three years of payments to her creditors they will show as unsatisfied on her report - your wife will need to make sure this has been completed correctly on her report also

 

Hmmmm - maybe that's why she's getting nowhere with any c/card application. Good thought - thanks. Only six months to go!

[BRIGADIER2JCS]

If the entries on the files are defaulted accounts they

will still remain on file for the remainder of the six year

life of the default entry.

After 6 years defaults are removed paid or not satisfied

markers are unlikely to make much difference to the ability

to obtain credit, also many lemders are looking a lot further

than the usual 3 years credit history and some want as much

a 5-6 years good ++ credit history.