Obtaining a Company Credit Reference

Company credit references can be obtained the old way, or the new. Traditional methods of obtaining a credit reference can be unreliable so an automated system is often preferable. Regardless of the method by which you choose to obtain one there are some strict application criteria and methodologies to be adhered to. When an application for a loan, credit card, bank account or mortgage is made, the chances are that the company responsible for extending the line of credit will run a check with a credit reference agency.

These agencies check the electoral register to verify details such as addresses, any bad debts, and bankruptcies and perhaps on how reliably repayments of existing loans are made. It is essential that the information making up the reference is accurate and up to date; otherwise the consequences could be very damaging for both, or either parties. The Data Protection Act 1998 allows any company or individual access to their information.

If you are about to apply for a mortgage or other major loan it may be worth checking in advance to see exactly what information credit reference agencies hold on you. Correcting any errors in advance could help you avoid problems at a later stage, when you may not be able to get things put right in time. When applying for this information, you should state that your request is limited to personal information relating to your financial standing. The data controller will then be required to reply within seven working days. The maximum fee that you can be charged is £2 and you should enclose this with your application.

Individual Credit References

As an individual, under the Consumer Credit Act 1974 you are entitled to have incorrect information held within your credit reference corrected. If the file contains mistakes, the agency must correct them and confirm any changes, in writing, within 28 days. If it refuses, or you are not satisfied with the amendment, you can send it a note of correction of up to 200 words, which it must add to your file and send out whenever information about you is supplied in the future.

Credit reference agencies must add a Notice of Correction to a person's 'credit file' and supply the notice to any lender who makes enquiries. This ensures that any future application for credit is 'referred' when being processed - in other words the Notice of Correction must be read and taken into account by a lender. Someone may default on a credit agreement or incur a County Court Judgment or Scottish Decree against them because of a sudden change in circumstances - for example redundancy or a personal tragedy. If the actual information held by credit reference agencies is factually correct, despite the circumstances, it cannot be altered as it is a true account of a person's credit history and this is where a Notice of Correction is especially useful.

It is advised to use a Notice of Correction to explain any special circumstances, which led to financial difficulty, and, if required, you should take professional advice about how the Notice should be worded to best effect. It should also be taken into consideration for any credit reference that people sharing the same surname at the same address are currently linked on the databases because lenders may take all household finances into account when making credit decisions. If you experience difficulties in obtaining credit as a result of information held on other family members living at the same address as you, you can apply to have your credit reference "disassociated" from theirs.

Once a disassociation has been created, when any subsequent credit reference check is carried out, the lender sees only details of the person being searched and anyone with whom that person has a financial link. Details of the disassociated family member or members are not provided. You only need to make an application to one of the main agencies. That agency will then be responsible for notifying the others. County Court Judgments are also recorded on your reference and are officially recorded for six years from the date of judgment. If a judgment has been paid it should be marked as 'satisfied' on the databases. If paid within one month it can be removed altogether from the credit reference.