A Simple Guide to Credit Repair Agencies

By: James Miller

This article mentions some terms commonly used with this topic. Here are some definitions. Bad credit rating : When you make an application for any kind of loan, the would-be loan company will look at your credit report to assess your credit worthiness. He will then give your application a credit rating like excellent, good or poor. If you are given a bad score, you will find it challenging to get credit. A credit score is considered bad when you have an adverse credit history. Overdue or missed monthly payments and legal judgements will reduce your credit score. A 'CCJ' refers to County Court Judgement. This signifies a legal judgement decreed by a County Court regarding someone who has an existing debt to someone else (either an individual or company) or a case where they have not fulfilled the conditions of a contractual credit agreement. A CCJ will determine a suitable reimbursement timetable with the purpose that the debtor will begin to cover the money they owe. CCJ's are held on public record and will have an impact on the debtor's potential of accessing further credit for as long as six years.

If your credit history is poor because you have experienced financial difficulty in the past, and you are finding it hard to get accepted for credit, then the chance to have your credit repaired can be tempting.

There are many advertisements in magazines and on the television for organisations saying that they can 'restore' or 'clean' your credit file. However, the Office of Fair Trading (OFT), who are the consumer protection authority, warns consumers to tread carefully if considering this type of service.

According to the OFT, using these companies you could make the situation worse - and here are the reasons why:

1. In some cases, these companies are using the service as a front for what they really are - loan companies or brokers who will try and sell you loan
2. Some credit repair companies tell you how to make a 'successful' application for credit - by calling a costly premium rate telephone number that has a recorded message.
3. The information given to you once you have called explains how applications are credit scored - and how, by being creative, you have more chance of getting accepted. This is tantamount to fraud, as they are suggesting you give false information.
4. These credit repair companies say that they can remove negative information from your file, such as CCJs - this is not possible. CCJs cannot be removed from a person?s credit file unless they were incorrectly granted or have been discharged.

The best chance you have of getting accepted for credit is, in the first place, to check that all your information on your credit file is correct (contact Equifax or Experian for a copy from around ?2).

Equifax is a important credit referencing agencies in the UK. Equifax compiles all your financial statistics from a range of places to develop a file that details your personal financial history - i.e. your credit report. If you request for any credit, loan providers will investigate your credit file to know about your credit record. It's possible to get a printed copy of your file when ever you like so that you can see that all is in order. The Equifax online website has plenty of valuable advice on making credit choices and protecting yourself from fraud.

Experian is a important credit referencing agencies in the UK. Lenders will go to a credit reference agency to check the suitability of an prospective borrower as determined by their financial history. This is known as a credit file. As a borrower, you may get a copy of your credit file from Experian so that you can see that all the information on it is accurate and that your financial details have not been used illegally.

If it all is in order, then make sure that you pay all your existing bills on time to keep your record as clean as possible. For more information, contact your local Citizens Advice Bureau.

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