Updating credit reference file crucial to obtaining personal loans, says ICO

Applicants for personal loans or credit cards must ensure that the information held on their credit reference file is up to date, or risk being refused due to incorrect data, according to the Information Commissioners Office (ICO).

Consumers can request a copy of their credit reference file for £2 from credit reference agencies such as Experian or Equifax, and online applications are also possible. The file must be provided within 7 days.

Ensuring that the following information categories are up to date is essential.

Your credit reference file will show banks and lenders how well you repay your debts, and if you pay on a timely basis in other words, if you are a good payer.

Your credit reference file will show details of existing loans you have. Lenders may decide that applicants who already have several loans can afford no further credit, even though they may be good payers.

Your credit reference file will also list any ‘financial links’ you have, including the identities of any person with whom you have a joint bank account or joint mortgage. They may also run a credit check on that person, so it’s essential to update details of any financial links you had that no longer exist.

Some lenders use a process of ‘credit scoring’ when considering an individual for credit. This involves giving you a points score based on your age, your job status, your type of job, and whether you own your own home. It is essential to ensure that developments in any of these areas are correctly registered in the records they use.

Details of personal loan or credit card accounts, whether live, closed or defaulted, remain on your file for 6 years.

Other information stored in your credit reference file for a certain time includes bankruptcy (kept for 6 years), an Individual Voluntary Arrangement or IVAÂ (6 years), a court administration order (6 years), and a county or high court judgement (6 years, but may be removed if paid in full within 1 month of the judgement).