Credit Repair

"Credit Repair Promises Fall Short"

Advertisements offering to 'clean your credit reference file' or 'restore your credit rating' by rubbing out any record of debt, should be treated with caution according to the Government's consumer protection authority.

The Office of Fair Trading warns that the information given by so called credit repair companies may be wrong, misleading or guaranteed to get you into worse trouble - and ensure that you are even more out of pocket. They may also be a 'front' for a lender or broker who is simply trying to sell you a loan.

Typically the companies say they can remove unfavourable information, such as county court judgments, from your credit files and give guidance on how to make a successful application for credit. Often the advertisements urge you to call a costly premium rate telephone line for more information.

John Bridgeman, Director General of Fair Trading, said:

'These companies offer nothing that you cannot do for yourself. County court judgments cannot be removed from credit files unless they have been discharged or were incorrectly granted. Unsubstantiated claims that a court summons was not received or that correct procedure was not followed will not persuade a court to remove a judgment from its records.

'It is possible to check for yourself what is on your files and request that corrections are made if the information is incorrect. Advice and guidance on this is available from your local trading standards department and local citizens advice bureau.

'Some credit repair companies provide booklets containing advice on how to make successful applications for credit. These explain the system of credit scoring used by many lenders and suggest answers by which you can score high points. What they don't say is that supplying false information on a credit application form could amount to fraud, which is a serious criminal offence. Don't be tempted.'

Credit files on almost every adult in the UK are kept by credit reference agencies which supply information about your credit record to lenders. If you are refused credit, lenders do not have to tell you exactly why they have turned you down but they should give you an indication of the reason such as information provided by a credit reference agency.

What you can do about it:

* Obtain a useful booklet 'No Credit?' from the Office of the Data Protection Commissioner, Wycliffe House, Water Lane, Wilmslow, Cheshire SK9 5AF 01625 545745
* You have a right to ask the credit reference agencies for a copy of your file. Send £2, your full name and address and any other addresses you have lived at during the past 6 years to the agency. The two main agencies are: Equifax Plc, Credit File Advice Service, PO Box 1140, Bradford BD1 5US and Experian Ltd, Consumer Help Service, PO Box 8000, Nottingham NG1 5GX
* If a judgment debt is paid within a month of it being granted, the judgment is cancelled and all mention of it removed from court records and credit reference files. But the history of the debt may not be deleted from the credit reference files.
* Judgments paid after one month can be marked 'satisfied' by applying to the county court for a Certificate of Satisfaction which will be passed by the court to the credit reference agencies.
* If you think the information on your credit reference file is incorrect you have a right to have it corrected or removed. If you think that information on a county court judgment is incorrect you should ask the court for guidance on what you can do about it. If you think other information is incorrect you should write to the credit reference agency.

What the law says:

* The Consumer Credit Act 1974 gives you the right to have incorrect information corrected or removed from your file or have a note put on the file which explains why you think the information is wrong.
* Under this Act the credit reference agency has to tell you within 28 days of receiving your letter if they have taken action to correct your file or why they have not done so.
* Under the Data Protection Act 1998 you should be told, unless it is already obvious, if the files of a credit reference agency are to be searched when you apply for credit.
* The Theft Act 1968 makes it an offence to supply incorrect information on an application for credit

Source: OFT Consumer Alert