Credit reference agencies (CRAs) hold information that lenders use to decide whether to offer credit, so an incorrect entry can cause an application to be refused. The UK’s three main consumer CRAs are Equifax, Experian and TransUnion, and the Information Commissioner’s Office (ICO) explains how to challenge inaccurate data. The correction procedure in the Consumer Credit Act 1974 applies UK-wide.
Get your statutory report first
The ICO says everyone has the right to request a copy of the information held about their financial standing from any CRA, free of charge, verbally or in writing. It advises looking for the phrase “statutory report” on CRA websites because no subscription or fee is required, and suggests including full name, previous names, addresses for the last six years and date of birth. The CRA has one month to respond, or up to two extra months in some circumstances if it says why within the first month. The ICO also notes that lenders decide which CRAs they report to, so a file at one agency may contain accounts that another lacks.
Who is responsible for an entry
According to the ICO, the problem may lie with the lender or organisation that supplied the data rather than the CRA, and as a general rule an entry showing a company’s name is that company’s responsibility. CRAs cannot amend such data without that company’s permission, although the ICO still expects them to take reasonable steps to keep reported information accurate. Entries the CRAs generate themselves, such as financial links, linked addresses and alias information, are their responsibility. The ICO says lenders can also update their own entries directly through facilities the CRAs provide, so an urgent change should not need to be routed through the agency.
The formal notice route under the Consumer Credit Act
Section 159 of the Consumer Credit Act 1974 lets an individual who has received their file and considers an entry incorrect, and likely to be prejudiced if it is not corrected, give the agency notice requiring it to remove or amend the entry. Within 28 days of receiving the notice, the agency must tell the individual whether it has removed the entry, amended it or taken no action.
If the entry is not removed, the individual can serve a further notice within 28 days requiring the agency to add a notice of correction of up to 200 words drawn up by the individual. The agency has a further 28 days to confirm that it will comply, unless it intends to apply to the relevant authority because the notice would be incorrect, unjustly defamatory, frivolous, scandalous or otherwise unsuitable. If the agency does not reply in time, the individual can also apply to the relevant authority, who may make an order; failing to comply with the order is an offence. The relevant authority is the Information Commissioner for individuals, or the FCA for partnerships and other unincorporated bodies.
Common situations
The ICO gives worked answers to several scenarios. A default can normally be recorded even if no default notice was received, provided it accurately reflects events and the borrower was told this could happen, because data protection law does not require a default notice before listing a default. After a discharge from bankruptcy, the borrower should notify each lender, who will not be told automatically, and ask them to update the entry, with the ICO suggesting a complaint if the lender does not amend it within a month of receiving proof. A file that shows another person with the same name is usually a mix-up, but could be identity fraud, and should be reported first to the CRA. Credit taken in the borrower’s own name for someone else will show on the borrower’s file even if the other person stopped paying.
Where to complain
The ICO advises complaining first to the CRA and, where relevant, the original lender. If both refuse to correct an obvious inaccuracy, a complaint can be made to the ICO, although the ICO says it is not its role to decide financial disputes. The ICO’s page also notes that its guidance is under review because of changes made by the Data (Use and Access) Act, so the current position should be checked before relying on it for a specific case.
FAQs
Is it free to see my credit file?
Yes for the statutory report. The ICO says there is no obligation to sign up to a monthly subscription to obtain a copy of the information about your financial standing.
How long does a credit reference agency have to answer a correction notice?
Section 159 gives it 28 days from receiving a notice to say whether it removed the entry, amended it or took no action.
Can I add my own explanation to an entry?
Yes. If an entry is not removed, section 159 allows a notice of correction of up to 200 words, subject to the agency’s right to apply to the relevant authority if it is unsuitable.
Bottom line
An incorrect credit entry can be challenged by getting the statutory report, identifying whether the lender or the CRA is responsible, and using the section 159 notice procedure with its 28-day steps. If both refuse a clear correction, the ICO can be asked to look at it. This is general information based on the sources below, not legal advice.