How To Obtain Your Credit FileandRepair Credit Problemsby Creditplus
Contents1.0	 Introduction2.0 	 How To Get Copies Of your Credit File	 2.1 Agency Addresses	 2.2 Sample Letter3.0 	 Underst...
Page 5 Copyright © Whichdeal LimitedWhenever you try to obtain credit the company that are potentially going to lend youmo...
Page 6 Copyright © Whichdeal LimitedIt can be difficult to understand your credit file and to make sure everything withiny...
Page 7 Copyright © Whichdeal Limited2.1 Here are the addresses of the respective agencies:Experian Ltd,PO BOX 8000,Notting...
Page 8 Copyright © Whichdeal Limited2.2 SAMPLE LETTERYOUR NAMEYOUR ADDRESSTOWNCOUNTYPOSTCODEExperian Ltd,PO BOX 8000,Notti...
Page 9 Copyright © Whichdeal LimitedWhenever you request credit, be it from a high-street shop, a loan company or creditca...
Page 10 Copyright © Whichdeal LimitedUsually the main credit agencies will hold the same or very similar information aseac...
Page 11 Copyright © Whichdeal LimitedAn area that many consumers are unaware of when applying for credit is that alarge nu...
Page 12 Copyright © Whichdeal LimitedWhen you receive your credit profile you will see both the positive and negative     ...
Page 13 Copyright © Whichdeal LimitedBankruptcyIf you become bankrupt you will struggle to obtain finance. Again, this inf...
Page 14 Copyright © Whichdeal Limited3.2 Positive EntriesSubscriber Supplied Information / Credit Account InformationUsual...
Page 15 Copyright © Whichdeal LimitedYou will also be able to see a summary of the last 36 months, where the Defaultswould...
Page 16 Copyright © Whichdeal LimitedPlease note the steps you can take to improve your ability to get good credit:Check y...
Page 17 Copyright © Whichdeal Limited5.0 A Guide to Cleaning UpYour Credit HistoryThe next section will help you to make s...
Page 18 Copyright © Whichdeal LimitedPlease note: you will need to fill in the details that are relevant to your personal ...
Page 19 Copyright © Whichdeal Limiteda credit agreement.  They are not in the public domain (unlike County Court Judgement...
Page 20 Copyright © Whichdeal LimitedProvide the finance company with as much information as you can. The more youprovide ...
Page 21 Copyright © Whichdeal LimitedWrite to the court to request all information they hold against you in regards to any...
Page 22 Copyright © Whichdeal Limitedagree with part of it?•	 Was the summons taken out against both yourself and another ...
Page 23 Copyright © Whichdeal LimitedBelow is an example of the N244 Notice of Application form.  As previously        men...
Page 24 Copyright © Whichdeal Limited5.5 The AffidavitThis next part, “The Affidavit” is essential if you are to make the ...
Page 25 Copyright © Whichdeal LimitedOnce the court has received your request, they may ask you to be present for theheari...
Page 26 Copyright © Whichdeal LimitedSAMPLE FORM:AFFIDAVIT No 1Sworn on ………… 20 ……..Filed on behalf of the Defendant.In th...
Page 27 Copyright © Whichdeal LimitedOnce you have had it confirmed that the judgement has been “Set Aside”, you canwrite ...
Page 28 Copyright © Whichdeal Limitedtheir lending criteria. A lender will then use the information found in your credit f...
Page 29 Copyright © Whichdeal Limited9.	 You May Still get a Loan with CCJs - Not everybody will reject you if you haveCCJ...
Page 30 Copyright © Whichdeal LimitedIf you are a tenant and move house frequently, it will start to impact your creditsco...
Page 31 Copyright © Whichdeal LimitedAs mentioned previously in this guide, it is very important to have a bank account.Id...
Page 32 Copyright © Whichdeal LimitedIf you own your own home, or are paying a mortgage to own your own home,      lenders...
Page 33 Copyright © Whichdeal LimitedQ: Why was I turned down for credit?A: The lender you applied to made this decision, ...
Page 34 Copyright © Whichdeal Limitedplication form to a lender, may be used by that lender to give you a credit score. Th...
Page 35 Copyright © Whichdeal LimitedTo recap, the key elements for many underwriting decisions are based on: tractabil-it...
Page 36 Copyright © Whichdeal LimitedQ: How long does information stay on my credit file?A: All negative information stays...
Page 37 Copyright © Whichdeal LimitedQ: How do I correct negative information on my credit report?A: Challenging the accur...
How to Obtain Your Credit File and Repair Your Credit Problems
How to Obtain Your Credit File and Repair Your Credit Problems
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How to Obtain Your Credit File and Repair Your Credit Problems

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By visiting http://www.creditplus.co.uk you can get more information on the issues discussed in this credit repair guide, including a free tool to check your credit rating.

This easy to follow guide walks you through the process of understanding and repairing your credit rating, it is meant for use in the UK.

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How to Obtain Your Credit File and Repair Your Credit Problems

  1. 1. How To Obtain Your Credit FileandRepair Credit Problemsby Creditplus
  2. 2. Contents1.0 Introduction2.0 How To Get Copies Of your Credit File 2.1 Agency Addresses 2.2 Sample Letter3.0 Understanding Your Credit File 3.1 Negative Entries 3.2 Positive Entries4.0 How to Improve Your Chances of Getting Credit5.0 A Guide to Cleaning Up Your Credit History 5.1 Sample Letter 5.2 Default Notices 5.3 How To Remove Searches 5.4 How To Remove CCJs 5.5 The Affidavit6.0 Credit Scoring and Finance Applications 6.1 Top Reasons Why Your Credit Score Might Be Low7.0 Frequently Asked Questions Page 5Page 6Page 12Page 16Page 17Page 28Page 33
  3. 3. Page 5 Copyright © Whichdeal LimitedWhenever you try to obtain credit the company that are potentially going to lend youmoney will always check your credit file. What they find on your credit file will be thedetails that make up your credit rating and ultimately determine whether or not theywill offer you the credit line that you are applying for.When you have a good credit file you will often have a wider choice of where youwish to obtain credit from. When you make an application you will be highly likely tobe accepted without any issues. However, if you have a credit file that has a historyof negative issues such as miss-payments, defaults, CCJs and other problems, itcan be hard to know what to do next. Each month at Creditplus we have customersthat struggle to obtain credit for a car. We know from our own customers experiencethat it can be distressing to find out that your credit file has issues, some of whichyou may not even be aware of.We have created this guide to aid anyone who is struggling to obtain credit to startthe journey of repairing their credit file. All of the key information you need isincluded in this one report. There is no need to go off and use an independentcompany that will charge a small fortune while making false promises about howthey will improve your credit file.Within this guide we will provide you with vital information such as:• Where to obtain copies of your credit file (including sample letters)• How much your credit file will cost• How to understand your credit file• What counts as positive and negative points on your credit file• What you can do to improve your credit profile• How to clean your profile so it accurately represents your credit history• How credit scoring works and which areas hold the most weight• Many frequently asked question about credit ratings1.0 IntroductionDid you know…You can improve your credit rating
  4. 4. Page 6 Copyright © Whichdeal LimitedIt can be difficult to understand your credit file and to make sure everything withinyour file is correct. This can become even more difficult when you miss payments orother negative issues appear on the report. This guide has been created toensure that you can quickly navigate your way through the potential minefield ofcredit, credit files and credit scores.The most important thing that you need to know is what is in your credit file andhow you can improve it if needs be. To do this you need to obtain a copy of yourfile, which you are legally entitled to. These credit files are held by credit referenceagencies, and the main agencies are called Equifax, Experian and CallCredit. Thegreat news is that it only costs £2 to receive a copy of your report, and the moneysimply covers the cost of the paperwork and administration from each agency.These agencies will not give you this information over the phone, so you need towrite a letter to receive a copy of your file. This document should quote your fullforename and surname, your date of birth and (this is very important) full addressesfor everywhere you have lived in the last six years (addresses must include yourpostcodes). If you have forgotten any of your addresses the Royal Mail websitehas a useful postcode finder tool which can help you which you can find on their website (www.royalmail.co.uk). Write the letter (the template example can be foundon the next page) and include a postal order or a cheque for £2 (made payable tothe company you’re writing to). Your credit file should arrive shortly after.Alternatively, you can apply and even view your file online if you like, which can savea lot of time. You need all the same information, however you simply need to visitthe following web pages:http://www.equifax.co.uk/Products/credit/statutory-report.html#http://www.experian.co.uk/consumer/statutory-report.htmlhttps://www.callcredit.co.uk/stat-report-online/If you are married, it is recommended that you send separate documents and youwill need to pay separately as well. This is recommended because it may still bepossible that one of you has bad / inaccurate information on their file, whereas theother may still have a good credit profile and be able to obtain credit at a good level!2.0 How to Get Copies OfYour Credit FileDid you know…You can obtain a free copy of your credit rating
  5. 5. Page 7 Copyright © Whichdeal Limited2.1 Here are the addresses of the respective agencies:Experian Ltd,PO BOX 8000,NottinghamNG1 5GXFor convenience, you can also apply online at:www.experian.co.uk/consumer/orderPaperReport.htmlEquifax PLC,Credit File Advice Centre,Box 1140,BradfordBD1 5USTheir website can be found at:www.equifax.co.ukConsumer ServicesCallcredit LimitedPO Box 491LeedsLS3 1WZCallcredit’s website can be found at:www.callcredit.co.ukDid you know…We have provided sample letters in this report
  6. 6. Page 8 Copyright © Whichdeal Limited2.2 SAMPLE LETTERYOUR NAMEYOUR ADDRESSTOWNCOUNTYPOSTCODEExperian Ltd,PO BOX 8000,NottinghamNG1 5GXTo whom it may concern,Under Section 158(1) of the Consumer Credit Act 1974, I am writing to request astatutory copy of my credit file. To cover these costs, please find enclosed a postalorder for £2.00.My name is FORENAME (MIDDLE NAME) SURNAME and my date of birth is the00th MONTH YEAR. My current address and all my addresses for the last six yearsare below:ADDRESS ONE, TOWN, POSTCODE – May 2011 to PresentADDRESS TWO, TOWN, POSTCODE – May 2010 to May 2012ADDRESS THREE, TOWN, POSTCODE – May 2005 to May 2010Yours Faithfully,YOUR NAMEDid you know…Whenever you apply for credit your file will bechecked
  7. 7. Page 9 Copyright © Whichdeal LimitedWhenever you request credit, be it from a high-street shop, a loan company or creditcard company, they will run a credit check with one or more credit agencies that holdyour credit information.Please Note: Every UK resident over the age of 16 years will have a credit file. Thiscredit file is completely legal and can not be opted out of. The credit file will hold information about your credit history. This information will then be used to determinewhether credit will be offered and the rate of interest.Depending on the company you have applied to for credit and the information aboutyour previous credit history, there may be times when your credit request isrejected. In this case, it is possible to ask the company to release information onwhich agency issued the credit information to them. In the UK, the agency that hasbeen checked would generally either be Equifax, Experian or CallCredit.If you would like to know which Credit Agency has been contacted when you madean application for finance, the company that you approached to borrow money fromlegally has to tell you which agency they checked with. Below is a sample letter thatyou can use to contact a company to identify the credit agency which your recordshave been checked against:SAMPLE LETTER:Dear (COMPANY NAME)Under Section 157 of the Consumer Credit Act 1974, I am writing to request thename and address of any credit reference agency which has issued you informationabout me. I request that you reply within the next seven working days upon receiptof this letter.Yours FaithfullyYOUR NAMEDid you know…You can not opt out of having a credit file
  8. 8. Page 10 Copyright © Whichdeal LimitedUsually the main credit agencies will hold the same or very similar information aseach other. They also regularly share their information to ensure that all creditagencies offer the best possible level of detail about the credit history of anindividual. There is a possibility, however, that their files will not match, due to themholding different databases. Building societies, banks and other finance houses arealso offered a similar service from the credit agencies to ensure they can makesensible decisions about their customers and who they offer credit to.All information held by these agencies, both good and bad, is deleted after aperiod of 6 years. Even if the relevant debt is cleared, CCJs are held for a six-yearperiod, due to lenders being interested in a rounded credit history of the customer,and would want to know of any recent reasons why the borrower may have failed topay back their debt.Typical details that may be held would include:• Your name• Your address• How long you have been at your current address• Your date of birth• All known credit transactions• Lender details• Repayment details• Your account’s current status• Any other information related to previous borrowing• Voter’s electoral information• Known aliases• Financial linked associates• Recent credit searchesYou are free to obtain this information. There should not be any additionalinformation about you either so you should carefully check what is on your file.Did you know…Each credit agency will hold slightly differentinformation about you
  9. 9. Page 11 Copyright © Whichdeal LimitedAn area that many consumers are unaware of when applying for credit is that alarge number of searches (or inquiries) can have an adverse impact on your creditscore. This is more likely when you have had a borrowing requested declined. Aseach time you make a borrowing request to a lender it is recorded, lenders that youapply to in the future will be able to see the information. They won’t be able to seethe lender’s names, but will see the date and type of search.Another point to keep in mind is that having too many credit searches can affect theway that lenders view your credit profile. If you are simply shopping around for aquote to see if credit is affordable it is sensible only to apply to one or two lenders.Some people will get very anxious about credit searches, but they are normal andwill not impact you too much as long as you are sensible with the amount that youhave conducted on your file.If you are not serious about obtaining credit then it is best not to have a creditsearch conducted. However, you will always have a credit search on your file whenyou do apply so do not be afraid of this process.If you have been rejected three or four times we would recommend that you stopapplying for credit and following some of the steps in this guide to obtain and repairany negative issues that may be on your file.Did you know…The information on your credit file will be removedafter six years
  10. 10. Page 12 Copyright © Whichdeal LimitedWhen you receive your credit profile you will see both the positive and negative entries that are listed. There may be terms on your file that you do not understand.The list of terms below explains each of these to make sure you have a clearunderstanding of different points on your credit file that could be affecting your creditrating.3.1 Negative EntriesMissed PaymentsWhen you miss a payment it will be recorded on your credit file. Often missingpayments will harm your credit file and may mean that you will struggle to obtaincredit at a later date. Even if you just miss the odd payment, when you do getaccepted for a loan you may find that the rates are higher than expected, as you arenow perceived as being a higher risk to the lender. Recent missed payments havemuch greater negative impact than historic ones. Current arrears have maximumnegative effect.DefaultsIf you have missed multiple payments on a credit agreement it may result in a “default”. If you default on a credit agreement the company that lent you the moneywill send the record of the default to the various credit agencies and they will beplaced on your credit file. The payment profile will then stop and only the balance isupdated - This stays on your file for 6 years.County Court Judgements (CCJs)CCJ stands for County Court Judgements, this is the term used when you havebeen taken to court for failure to pay back money you owe. Unfortunately CCJs will negatively affect your credit file and you will struggle to borrow money from prime ornear prime lenders. A CCJ will stay on your credit profile for 6 years and willseriously harm your ability to obtain credit. If you pay the money owed within onemonth of the of the court issue you will be able to have the CCJ removed from yourfile, but in order to do this, you will need a Certificate of Satisfaction. If you pay theamount AFTER one month, it will be shown on your file as settled (if the abovecertificate is issued) for six years. Even though it is settled, lenders will see anyCCJs on your credit file as a negative entry and it can impact future credit requests.3.0 Understanding YourCredit FileDid you know…Negative points on your file will affect the rate youcan borrow at
  11. 11. Page 13 Copyright © Whichdeal LimitedBankruptcyIf you become bankrupt you will struggle to obtain finance. Again, this information isheld for 6 years by the credit agencies. There are ways to get this removed though. If your bankruptcy order is “annulled” or withdrawn, you can send a copy of the certificate you will have been issued to the credit agencies. If your bankruptcy orderends, you must send a copy of the discharge certificate, and the agencies will alsoupdate their files.C.I.F.A.S.This stands for Credit Industry Fraud Avoidance System, and any CIFAS entry onyour file is bad. CIFAS registers different types of fraud, such as false names, stolencredit cards and false applications. When there is a CIFAS entry, it means lenderswill take extra care to ensure that the application is genuine, though unfortunatelysometimes the application will just be rejected, even if it is legitimate. One reasonfor this, for example, would be if your address has been used for fraudulent activityin the past. The credit referencing agency should be written to, requesting all thedetails of a CIFAS entry if this is the case.IVAIVA stands for Individual Voluntary Arrangement and is used by an individual tocome to a deal with a lender to avoid declaring themselves bankrupt. An Iva is alegally binding contract, which stays on your file for six years. Essentially, theyallow you to consolidate your debt into a single monthly payment. There are majorbenefits to an individual to enter an IVA as often they will be able to reduce their totalamount of debt by up to 75%, leaving the individual to pay off the balance within 3 to5 years. Lenders will not look at an IVA in a positive light, and individuals willstruggle to obtain credit until this is removed from their credit file.Did you know…Being on the electoral roll is vital to borrow money
  12. 12. Page 14 Copyright © Whichdeal Limited3.2 Positive EntriesSubscriber Supplied Information / Credit Account InformationUsually when you have a line of credit the history of that credit will be detailed onyour credit file. Each credit account that you have will be listed individually, althoughit is possible that not all of your accounts are listed.The credit will be represented by a row of 12 numbers. Each of the 12 numbers represents a month of the last rolling year. The number shown will representwhether or not you have made payments on time. They also show if payments aremade late, how late they are and if you have defaulted (this will be represented witha D not a number). Below is an example...0 0 2 1 1 2 2 3 2 2 1 0In the example above shows the account holder was 2 months behind, 3 monthsago, and 2 months behind, 6 months ago, etc. A well looked-after account wouldgenerally be filled with only 0’s and the occasional 1 (if you were late one month). Ifyou have all 0’s it means you’ve kept up with all of your payments for the last year.This is a very good signal for lenders as it shows that the person has the ability tomanage their finances well. This makes them a lower risk when it comes to lendingthem money in the future.Here is a summary of what the codes mean:0 – Payments are up to date1 – In arrears by one payment2 – In arrears by two payments3 – In arrears by three payments4 – In arrears by four payments5 – In arrears by five payments6 – In arrears by six paymentsD – Account defaulted. This often means the account has been closed or legal action has been taken and the lender has formally asked for all the funds back.Did you know…You can challenge any incorrect information on yourcredit file
  13. 13. Page 15 Copyright © Whichdeal LimitedYou will also be able to see a summary of the last 36 months, where the Defaultswould generally be shown.Electoral Roll InformationThis is a very important factor and is usually understated by most consumers. Traceability is incredibly important to all lenders as it shows that you are happy toprove where you are living. The electoral roll is a list of all of the people who haveregistered at their current address and have the right to vote for elections.The electoral roll is generally prepared every February, so if you miss the date, it’sa good idea to contact your local authority and get your details added. This canthen be added to your credit file. If you are not on the roll, it may prompt lenders toquestion why, and will cause problems with credit applications. Lenders like to seea consistent address history as it means if anything were to go wrong and you don’tpay back the credit, the lender would know your current address.Did you know…You should inform your lender if you’re strugglingwith payments
  14. 14. Page 16 Copyright © Whichdeal LimitedPlease note the steps you can take to improve your ability to get good credit:Check your credit report - People that know exactly the state of their credit file willbe at a massive advantage when applying for credit. If you are unsure of what is onyour credit file make sure you get a copy of your file now. If nothing else it willensure there is nothing on there that shouldn’t be and that needs to be challenged.Check if you are on the Electoral Roll - If you’re not, get on it. It will definitely helpin the long run as lenders want to know where you have been living (also known astraceability).Get a Discharge Certificate – If you have been bankrupt in the past, but your bankruptcy has ended, make sure you inform the credit agencies. Send them thedischarge certificate or annulment and ensure that they update your file.Get a Certificate of Satisfaction - It costs just £10 to get a Certificate ofSatisfaction from a court. If you’ve paid a Judgement and it hasn’t updated to say“Settled” on your file, you should contact the court and request one immediately.Inform the Lenders if you are in trouble - If you are struggling to make paymentson time make sure that you inform the relevant lender or credit provider. These companies will look favourably on people who communicate with them when theyare struggling. Some lenders or credit providers may even be able to offer options tohelp you manage your debt. Do not just ignore that fact that you are struggling as itwill make things harder for you in the future.If you can make the payments, do! It goes without saying that making payments ontime is the most beneficial thing you can do.Challenge Incorrect Files - If all your payments have already been made and youhave always been up to date, but your file does not reflect this, contact thecompanies involved and they can make arrangements to change your file to reflectthis.4.0 How to Improve YourChances of Getting CreditDid you know…Every time you apply for credit a search will berecorded on your file
  15. 15. Page 17 Copyright © Whichdeal Limited5.0 A Guide to Cleaning UpYour Credit HistoryThe next section will help you to make sure you can clean up your credit file so youhave the best possible chance of obtaining credit in the future. Below are some important points that you should follow in order to make sure that your credit historyis accurate and as positive as possible.After 6 years it is normally your legal right to have information removed from yourcredit file. This is not always done automatically for you so make sure you write tothe credit agencies and request that it is completed.If you feel that an entry on your report needs explaining in more detail, you can file aNotice of Correction. This should be no more than 200 words, and must be correctand relevant to the entry you are writing to correct. Some good reasons to changean entry would be losing a job or suffering from a long-term sickness. However,some lenders will still reject applications with a correction stated.5.1 SAMPLE LETTERDear (Agency)REFERENCE NUMBERThank you for sending me my report dated 00.00.00, Please add the following correction to my file.NOTICE OF CORRECTIONI, YOUR NAME of YOUR ADDRESS would like it to be known that the judgementrecorded against me for £XXX refers to a payment I was unable to make due to being made redundant in 2010. I gained employment again in 2011 and paid the billin question. Please amend my file for anybody searching it to take these facts intoaccount.Faithfully,YOUR NAMEDid you know…No one can guarantee that a CCJ will be removedfrom your file
  16. 16. Page 18 Copyright © Whichdeal LimitedPlease note: you will need to fill in the details that are relevant to your personal situation.The new information that you provide will need to be updated on your file. An update will also be sent to any lender who has requested your information in thepast 6 months.If the notice of correction relates to a county court judgement or sheriff court decree,the agency will pass it to Registry Trust Limited, who will pass it to the creditreference agency. If the notice refers to information other than a judgement ordecree, you should check if the agency has the same information, and if so, send itthe notice of correction.The agency has 28 days to reply to your letter. If it doesn’t, you can ask the Data Protection Commissioner to intervene. There is a possibility that an agency mightdecline to add the notice to your file. In this case, it must refer the matter to theData Protection Commissioner for a decision.Sometimes your file may be mixed up with someone with the same name living atthe same address as you. If you believe this is the case then you can request anotice of disassociation from the credit reference agency. You will be sent a formwhich you will have to sign and return. Once this has been received by the agencythe record will then be deleted from your file. If the agency refuses to make a validchange you can go to the Data Protection Commissioner to look into the case.5.2 Default NoticesYou should check your file for any notices of Defaults. If you have any then youshould use the information provided below with the sample letter below to write tothe finance companies that have issued the defaults against you, at this point youshould try to settle the default.A default is a record sent to the credit reference agencies from banks, building societies or other financial institutions, detailing things such as missed payments onDid you know…An ‘Affidavit’ is vital if you want a CCJ ‘set aside’
  17. 17. Page 19 Copyright © Whichdeal Limiteda credit agreement. They are not in the public domain (unlike County Court Judgements); they are onlyheld in the credit agency records and are designed to alert other finance companiesthat you have defaulted on a previously agreed credit agreement. As such, they areviewed as important information for lenders who will use the information to make future decisions.The only way to remove a default is by contacting the organisation who served thenotice of the default in the first place. Looking through your file, you will be able totell who placed the notice. Once you have this information you can set aboutcontacting them and coming to an agreement. They may be able to remove thenotice in any of these situations:• The default notice was served but the payments were then brought up to date.• The loan has now been fully repaid.• The payments are still in default but an arrangement has been made with thecompany in question.• You think the notice has been placed on your file incorrectly.SAMPLE LETTER:Dear Sir/MadamI am writing regarding a record which has been placed on my file concerning a debtthat I owed to you. If this debt has now been repaid or settled, please write and con-firm this so that I am able to clear my name with the credit reference agency. If thedebt has not been settled, please write with the details of what you would require tosettle the outstanding debt.The loan was taken out on the DATE HERE and my account number is NUMBERHERE.Yours faithfully,YOUR NAMEDid you know…Each lender will have their own lending criteria
  18. 18. Page 20 Copyright © Whichdeal LimitedProvide the finance company with as much information as you can. The more youprovide them with the easier it will be for them to help you. For example, if you tookout the loan at an old address, include those details, along with the details of yournew address. If the finance company mention that you are still in debt with them,and gave a repayment date, it is worth writing back to them stating that you will onlydo this if they are prepared to write a letter asking that the default notice is removedfrom your report.Many large organisations are not good at keeping paper work and this can sometimes be an advantage you. Write to the lender to request a copy of theoriginal signed agreement for the debt. If they can’t do this you have the right torequest that they remove the default from your report, due to them having no signedagreement regarding the debt.5.3 How to Remove SearchesWhenever you apply for finance or credit the lender will search your credit file toascertain the level of risk associated to you. This search will be recorded on yourcredit file. Too many searches may make you look ‘credit hungry’ and this willadversely affect your credit file. If you have had searches conducted that you did notauthorise you will want to have these searches removed to ensure it does notdamage your file.To remove these searches you will need to write to the people who requested thesearches originally, and ask them to provide written proof that you authorised thesearch. If they can not provide this proof, can ask them to remove the search inquestion.5.4 How to Remove CCJsThe first thing that you need to be careful of when looking to get a CCJ removed isany company that promises they can have CCJs removed from your file. Nocompany can guarantee this, and most will only undertake the same instructionsthat we have listed below for you.Did you know…Having a bank account will help you when applyingfor credit
  19. 19. Page 21 Copyright © Whichdeal LimitedWrite to the court to request all information they hold against you in regards to anyjudgements which have been made. To remove judgements, you must use an N244 form. An example is includedbelow. It’s worth noting that some courts require that you use original forms, whichare available free of charge from the courts.Many people do not realise that a surprising amount of CCJs are the result of anundefended summons. These cases usually arise because the defendant doesnothing, as they do not know what response to give. The court then enters a“Judgement by Default”, which is passed through The Central Registry to the creditagencies. Even if the debt is paid off, the judgement would stay on the record ifnobody has asked for it to be “set aside”.If you dispute the debt, have paid the judgement or if you believe the CCJ wasn’tproperly obtained, it is possible to repair or even remove the entry from your file. Otherwise you will have to pay to repair it.As an example, the courts would look favourably on the defendant having beenmaking payments regularly for a year or so. Below we have listed other reasons toget judgements put aside. If you use these reasons keep them as clear and conciseas possible:• Were you given 28 days notice in order to pay the bills/debts?• Were you living at the address when the summons and judgements took place?• If you took out a loan for any form of credit were you in receipt of the Default Notice before receiving the summons?• Did you receive the summons? (They are not sent by recorded mail)• Maybe you were unable to attend court and defend yourself.• The judgement should not appear on the credit files if it was paid within 28 days.• If you agreed to settle “out of court” you should not have received a judgement.• If you did not receive any notification of the judgement(s) made against you, youcan appeal.• Did you agree with the full amount of the judgement at the time, but now onlyDid you know…Steady address history will help you when applyingfor credit
  20. 20. Page 22 Copyright © Whichdeal Limitedagree with part of it?• Was the summons taken out against both yourself and another person jointly? Ifso, did you both receive your summons?• It could have been that you were away from the time between the issue of thesummons and entry of the judgement.• Did you receive the summons on time for you to apply to the court? You have 21days to reply to the court. If the summons was 21 days late then the judgementwould have already been taken out against you.Before doing this, you will need a few things:1. The original summons2. The name of the plaintiff (who took out the summons)3. The name of the court4. The Case NumberThat last point is very important. Without the Case Number, courts will not evenread an application. If you don’t have it for any reason, you can write to the centralregistry and ask for the details. This will cost £15.00. The address you need to write to is listed below:Registry of Court JudgementsRegistry Trust Ltd173/174, Cleveland StreetLondonWP1 5PEDid you know…Even with a CCJ or default you may still get a loan
  21. 21. Page 23 Copyright © Whichdeal LimitedBelow is an example of the N244 Notice of Application form. As previously mentioned, some courts require original forms to be completed, which you can request from the courts.SAMPLE FORMPlaintiff / Defendant’s AddressYOUR NAMEYOUR ADDRESSYOUR TOWNYOUR COUNTYYOUR POST CODEState nature and grounds of application to be set aside…I wish to apply for…The reason being that (I did not receive the summons/wasn’t given enough time,etc…)Signed: ………………………………….Sign Here: ………………………………Dated: ….. ../ ……./20……Address for serviceYour Address: ………………………………………………………… …………………………………………………………Did you know…Being a home owner will help your credit rating
  22. 22. Page 24 Copyright © Whichdeal Limited5.5 The AffidavitThis next part, “The Affidavit” is essential if you are to make the court believe thatthe request is genuine. Without one, you are likely to be declined in your requestunless you have a very sympathetic court.Type or hand-write (with black pen in block-capitals) the defendant (you) and courtdetails onto the form N244 as you see above.Enter the reasons to “set aside” the judgement. The main aim here is for it to makesense. No legal jargon is necessary, other than after “I wish to apply for…” you fol-low it with “Judgement to be set aside on the following grounds.” It is here that youlist your reasons.Take both the Affidavit and N244 form to a solicitor’s office, and ask to see a solicitorfor “a Statutory Declaration”. In front of the solicitor you will swear to the truth of thestatement on the “Notice of Appeal”. You will “Make an Oath” that the statement istrue. You will then need to sign it in front of the solicitor. They will then sign and rub-ber stamp it.You will be charged the standard £5 fee, which has the advantage of showing thecourt you are willing to go to the effort to clear your record.On the Affidavit, only fill in your details and the court details. The bottom section isfor the solicitor you visit to fill in.The Affidavit, when “Notarised” by a solicitor and combined with the form N244 theybecome an official legal document, accepted as genuine and truthful by the courts. Without these, the request wouldn’t be so much as looked at, let alone processed.Once both documents have been signed, staple them together and send them firstclass to the court concerned. Make sure it is addressed to “The Chief Clerk”.Did you know…Affordability is important when applying for a loan
  23. 23. Page 25 Copyright © Whichdeal LimitedOnce the court has received your request, they may ask you to be present for thehearing. If you can’t make it, write to the court to tell them you cannot be there, andthat you will be happy to abide by whatever decision the court makes without youthere. It is highly likely the court will look upon this favourably, as it both saves themsome time and shows sincerity from yourself. Whenever you are writing to the court,remember to add the Case Number.After a few days you should receive notice from the court of your “set aside.”On the following page you will find a sample of how the Affidavit should look.Did you know…If one lender rejects your application another maystill accept it
  24. 24. Page 26 Copyright © Whichdeal LimitedSAMPLE FORM:AFFIDAVIT No 1Sworn on ………… 20 ……..Filed on behalf of the Defendant.In the …………………. County Court Case No. ………………….BETWEEN………………………………………… PLAINTIFFAND………………………………………… DEFENDANTI (Name)Of (Address)MAKE OATH and say as follows:I AM the Defendant hereinTHE written contents of Notice of Application Form N244 annexed hereto are true.I THEREFORE ask this Honourable Court to grant my request for judgement in theabove case to be set aside.SWORN atThis day of …………….. 20 ………Before me, a solicitor empowered to administer oaths.Did you know… Too many credit applications will reduce your creditrating
  25. 25. Page 27 Copyright © Whichdeal LimitedOnce you have had it confirmed that the judgement has been “Set Aside”, you canwrite to the credit reference agencies requesting removal of the CCJs from your file.The following letter can be used for removing both CCJs and Default Notices. If youonly need one or the other to be removed then delete as appropriate. Give them asmuch information as possible. The credit reference agencies are legally obligated toupdate your file as soon as possible.SAMPLE LETTERExperian Ltd,PO BOX 8000,NottinghamNG1 5GXDate: …………………….Dear Sir / MadamI have enclosed confirmation from the county court that the enclosed judgement hasbeen set aside. Please remove this judgement from my file immediately.I also enclose a letter from FINANCE COMPANY NAME stating that the loan fromthem has now been repaid in full and that they are prepared to have the default inmy file removed. Please also remove this immediately. Once you have carried outthe above, please write and confirm this as soon as possible.I look forward to hearing your reply.Best regards,YOUR NAMEBy analysing your credit file a lender will usually rate or score your file according toDid you know… You can improve your credit rating
  26. 26. Page 28 Copyright © Whichdeal Limitedtheir lending criteria. A lender will then use the information found in your credit file todetermine whether or not you are the type of customer they want to lend money to.It will also determine the likely interest rates that you will be offered by working out ifthe associated risk involved is high or low. The higher the score, the lower your riskyou pose to a lender.Here are some useful points that could influence the lending decision:1. The Lenders have their Own Criteria - Though all lenders refer to the credit referencing agencies (usually Experian or Equifax), it is always the lender’s decision whether or not you get accepted for credit. All lenders have their ownrules, and their own standards as to what credit score is acceptable.2. You Credit History is Vital - Your past credit history is an important part of yourcredit record. If your payments are up to date, and none have been missed, yourscore will be higher.3. It is Vital to be on the Electoral Roll / Voters Role - Any application is likelyto be hampered if you are not on the electoral roll. As mentioned earlier in thisguide, the roll is updated towards the end of the year and published in February,so get on it as soon as you can.4. Length of Current Employment – The longer you have worked for your employer the better it will look on your credit file. This shows stability in your earning and also shows that you are unlikely to suddenly not be able to pay backany loans.5. Length of Address History - Your credit score will be higher if you have lived atyour current address for 3 years or longer. It will also be a benefit if you have amortgage or if you own your own property.6. Bank Accounts – The longer you have banked with the same bank the morebeneficial it will be to you. Also if you have managed any overdrafts well you aremore likely to obtain a good loan rate.7. Number of Searches - As previously mentioned in more detail, each and everysearch on your file is recorded. If you have applied for many cases of finance, itcould make a negative impact on your credit score.8. Not All Lenders are the Same - Even though your information stays the same,each lender will have their own criteria. Therefore, your application may be refused by one lender, but accepted by another.6.0 Credit Scoring andFinance ApplicationsDid you know… You can obtain a free copy of your credit rating
  27. 27. Page 29 Copyright © Whichdeal Limited9. You May Still get a Loan with CCJs - Not everybody will reject you if you haveCCJs in the past year. However, it will lower your score and limit your ability toget good rates.Check Your Credit Score.It is likely that whenever you apply for credit you will be faced with a similar setof questions. These questions will have a certain score attached to them, and generally the weighting of these questions will vary slightly from lender-to-lender. The most common questions include details of your personal information, home address, job and address, salary, number of dependants, etc… It is possible that some lenders will ask questions others won’t deem important.Therefore it is possible that if you are turned down by one company that another willaccept you. You also shouldn’t assume that multiple lenders have all rejected you forthe same reasons.6.1 The Top Reasons Why Your Credit Score is LowPlease Note: Depending on the lender the importance of each of these points will beweighted differently.You have a bad history of paying back creditYour history of paying back borrowed credit can account for 35 – 75% of your creditscore. Don’t be fooled into thinking it is only larger problems such as CCJs ordefaults that will have a negative impact. Anything from missed payments, goingover your agreed overdraft, too many credit searches, or even the lack of monthlyaffordability can have a negative impact. Whilst negative entries will stay on your filefor 6 years, the impact of missed and late payments diminishes over time. If yourpayments have been on time over the last 48 months, the late, older payments willhave no impact on your score.You are not on the Electoral RollIf you are not on the electoral roll at the address on the application there is a highprobability you will be rejected.You have lived at your current address for less than 3 yearsDid you know… We have provided sample letters in this report
  28. 28. Page 30 Copyright © Whichdeal LimitedIf you are a tenant and move house frequently, it will start to impact your creditscore. This is because lenders like to see stability in your life if they are going totrust you with their money. Even if you have only moved a couple of times in the lastfew years your credit rating will start to drop. If you are a home owner the impactwill be lower. If you have been at your current address for less than 6 months, yourscore will be affected.New JobEmployment is another area that lenders like to see stability. If you have been in astable job for many years, you will be looked at far more favourably thansomeone who changes their job every few months. Ideally, if you are changing jobs, you should hold off on applying for credit for a few months. Also, if you’re ina probationary period, this can also result in a decline. This is not such an issue ifyour salary is increasing. Any reasons you have for changing jobs should be notedand included in the application (such as freelance employment, transfer withinsame company or promotions). Having a job for a number of years, though, is whatwill give you the better score. There is a chance the lender will ask to see the lastcouple of months of pay slips as part of the application, so keep these somewherehandy. It goes without saying that bouts of unemployment can adversely affect yourcredit score.If your profession requires you to move around and change jobs regularly (freelancers, artists, photographers, supply teachers, etc) it is worth writing thisdown and including it in the application.Income / AffordabilityWhenever you make a finance application you will be asked for your salary ormonthly net wage. Lenders need to know how much income you have each monthas they will calculate whether they think you are able to afford the re-payments. Asa rough rule of thumb, as long as your loan repayments are under a quarter of yourmonthly net wage, the lenders will be satisfied you can afford the loan. However, thiswill depend on any other fixed costs you have such as other loans and mortgages.Lenders will also want to ensure the source you get the income from is steady andthe amount you earn is consistent.No Bank Account / New Bank AccountDid you know… Whenever you apply for credit your file will bechecked
  29. 29. Page 31 Copyright © Whichdeal LimitedAs mentioned previously in this guide, it is very important to have a bank account.Ideally you will have held this bank account for a number of years. This will get youthe best credit score, having a new account will lower your score. Not having anaccount at all will be very detrimental to your application, so it is recommended youopen an account as soon as possible.Too Many Credit ApplicationsMaking an application every few months shouldn’t impact your credit score toobadly, but, anything more will begin to reduce your score. If you have made anumber of refused applications, try not to make any new ones for six months. Thisgives space before applying again and room for you to review your credit file andfind ways to improve it.Remember - EVERY application and search on your file is recorded if it’s run by alender. Some brokers (including Creditplus) run a “soft” search, which other lenderswill not see.Filling In The Application FormWhen you apply for finance it is vital that you complete each of the sectionsaccurately with honest information. There is no point trying to amend any of the information as lenders will run many different checks and you will be caught out.Sometime it might even be worth adding some additional information if you think it’srelevant. This may help to make sure your application is dealt with efficiently. Alsobear in mind that it is possible for perfectly responsible applicants to be rejected,simply because they don’t fit the lender’s profile of their “ideal” borrower.Clearly Complete Your ApplicationIf you can, make sure you type up your application as it will generally be clearer toread and will be more presentable than a hand-written document. If you cannot typeit, make sure your hand-writing is clean, presentable and always use block capitals.Owning Your Own HomeDid you know… You can not opt out of having a credit file
  30. 30. Page 32 Copyright © Whichdeal LimitedIf you own your own home, or are paying a mortgage to own your own home, lenders will look upon you favourably. This is because is shows that you areresponsible with money and that you are financially committed to an area.Therefore you are unlikely to move away suddenly to avoid paying back any debt.DependentsIf you are responsible for feeding, housing and clothing any dependents it mightaffect your score. Usually though, the score isn’t adversely affected until you have3 or more dependents, as it would indicate your budget could already be understrain. Surprisingly to some people, those who have no dependents achieve a lowerscore than those with 1-3 dependents. This is due to the assumption that they could easily uproot their lives and move on if their debts become too much.Did you know… Each credit agency will hold slightly differentinformation about you
  31. 31. Page 33 Copyright © Whichdeal LimitedQ: Why was I turned down for credit?A: The lender you applied to made this decision, and only they can tell you why.They may have turned you down because of information on your credit report orbecause of the information they have (such as the information you provided on yourapplication form). They are legally bound to tell you why they refused you credit andthey should tell you if their decision resulted from information held on your creditreport, as a result of credit scoring, or because of their policies on providing credit.Q: If one lender has turned me down for credit will others do the same?A: Not necessarily. Different lenders take different things into account when decid-ing whether to give you credit. One lender may refuse your application while anothermay accept it. If a lender turns down your application, get a clear explanation fromthem why they made their decision.Do not continue to try and get credit at this stage, it is always best to understandwhy you may have been turned down before contacting other lenders. Every timeyou try to get credit will be recorded in your credit file. Making several unsuccessfulapplications for credit over a short period of time can have a negative effect on yourfile. Follow the steps in this manual to obtain your file and start the process of clean-ing up your credit history.Q: Does making several applications for credit reduce my chances of gettingcredit in the future?A: Making several applications for credit over a short period of time can influencea lenders decision. If you are hopping around for the best deal, you should ask fora ‘quotation’ rather than applying for credit. Asking for a quotation should not affectyour chances of getting credit in the future because, for most types of credit, lendersdo not have to search your credit report to give you a quotation.Q: What is credit scoring?A: The information on your credit report, and the information you provide on an ap-7.0 Frequently AskedQuestionsDid you know… The information on your credit file will be removedafter six years
  32. 32. Page 34 Copyright © Whichdeal Limitedplication form to a lender, may be used by that lender to give you a credit score. Thelender will use this credit score to identify the risk of offering you creditQ: Can I find out my credit score?A: Yes, however different organisations have different methods of calculating creditscores. They do not have to tell you exactly how they work out their credit scores,but they should give you a basic explanation of how their credit scoring works. Theyshould also tell you whether your application has been refused because your creditscore was too low, or because of the information held on your credit report.Q: What do credit reference agencies do?A: Credit reference agencies have huge databases on the credit histories of con-sumers known as C.A.I.S data. This information is gathered and given to the creditreference agencies from shops, businesses, banks, etc, which have given you creditin the past. Your credit history contains information that potential lenders use toevaluate and determine your ability and willingness to repay credit. Typically, creditreference agencies give the following information: Your open accounts, credit limits,amount owing on loans, number of late payments, collection actions, and whetheryou own your own home or not. There is also a C.I.F.A.S database which detectsfraudulent activity.Q: How does a lender qualify me for credit?A: Most lenders look at the number of years you have worked at your present job,the kind of work you do, the number and nature of negative entries in your creditreport, the amount of credit you currently have, savings and or current accountswith the lender, length of time at your present address, is the telephone in your ownname, do you own your own home and other factors. They are looking for stability,especially in residence and employment, and of course, sufficient income to take onmore debt.Did you know… Negative points on your file will affect the rate youcan borrow at
  33. 33. Page 35 Copyright © Whichdeal LimitedTo recap, the key elements for many underwriting decisions are based on: tractabil-ity, affordability, credit worthiness and your attitude to pay back debt.Q: What do I do if I’m turned down for credit?A: Firstly, you need to understand why you have been rejected for credit. The lendermust provide you with the specific reasons why you were rejected, and the nameand address of the credit bureau that provided your credit report. You can appealyour rejection by sending a letter to the lender explaining why you are a better creditrisk than your credit report indicates. But, it is best to rebuild your credit before ap-plying for credit again.Q: Who can look at my credit file?A: Anyone with what is considered a permissible purpose can look at your report.These companies, groups, and individuals include:• Potential Lenders• Landlords (although they may only be able to view certain portions)• Insurance Companies• Employers and potential employers (usually only with your written consent)• Companies you allow to monitor your account for signs of identity theft• Any government agency (although they may only be able to view certain portions)• Someone who uses your credit report to provide a product or service you haverequested• Someone that has your written authorisation to obtain your credit reportQ: Can I prevent credit reference agencies from holding information aboutme?A: No, they have a legal right to hold information about people. Credit referenceagencies (Experian, Equifax and Callcredit) help lenders process credit applications.If they did not hold such information it would be much harder for you to get credit. Agood credit record makes it easier for you to get credit.Did you know… Being on the electoral roll is vital to borrow money
  34. 34. Page 36 Copyright © Whichdeal LimitedQ: How long does information stay on my credit file?A: All negative information stays on your credit file for anywhere from 1-6 years.Q: What’s the worst thing that can appear on my credit report?A: There are basically eight things that negatively impact your credit file. It is hard toorder the worst points as different lenders assess the information differently. Somecommon examples are: CCJ’s, bankruptcies, repossession orders, defaults (paid/unpaid), late payments, multiple searches, not being on the electoral roll.Q: I have bad credit. Do I have to wait 7 to 10 years before I can get a loan?A: It is possible for you to have a good credit file within 2 years of incurring prob-lems with your credit file. Why? Because lenders are much more interested in yourpresent circumstances than what happened to you 3 to 6 years ago. Rebuildingyour credit can be done rather quickly through a systematic plan and a little perse-verance. The credit reference agencies only hold information for six years, whetherpositive or negative. If you follow all our advice and you can quickly rebuild yourcreditworthiness.Q: I have my credit report. What do I do now?A: Go through it and look for negative items, such as: late payment history, multiplesearches, and public records (bankruptcies, county court judgments). If any of theseare inaccurate, dispute them directly with the credit bureau. This was covered inmore detail previously in the report.Q: I found errors on my credit report. What do I do now?A: All incorrect or unfair credit information has to be eliminated from your file. Allconsumers have the right to challenge the accuracy of their credit report. Once youchallenge the accuracy of a particular item, the credit bureau must investigate thatitem as soon as possible. If the credit bureau finds the item to be incorrect, or can-not confirm or deny it, it must be removed immediately from your credit file.Did you know…You can challenge any incorrect information on yourcredit file
  35. 35. Page 37 Copyright © Whichdeal LimitedQ: How do I correct negative information on my credit report?A: Challenging the accuracy or completeness of an item is the best way to have anegative item removed. It is best if you can include documentation that supportsyour challenge. If negative information is outdated, you again need to bring this tothe attention of the credit bureau. This should be done in writing. If the credit bureaufails to verify the items you challenged within a reasonable time (about a month)from the date your challenge was received then you should seek legal advice.Q: Should I use a credit repair agency to fix my credit?A: No. They often use illegal methods that can make things worse for you. Be waryof agencies that tell you that they can remove County Court Judgments (CCJs) andwho require a large fee up front. It is better that you handle your credit problemsyourself, because only you can do a good job of repairing your credit.Did you know…You should inform your lender if you’re strugglingwith payments

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