The majority of lenders use credit reference agencies to share factual information with each other about the credit their customers have and how it’s repaid. Agencies combine these records with information from public registers such as the electoral roll and court judgments to produce your credit report. The three credit reference agencies operating in the UK are Experian, Equifax and Callcredit.
Any information collected about you is used to compile a credit report which produces a numerical value referred to as a ‘credit score’. This score is important as it is used by many lenders to decide whether or not you are credit worthy.
Since the credit crunch of 2007, credit reports and scores have increasingly become an important consideration for organisations in and beyond the financial industry. Credit scores not only have implications for mortgages, credit cards and loans but can be used by mobile phone companies that provide contracts, car and home insurers and utility companies.
Getting a copy of your credit report
When requesting a copy of your report, credit reference agencies may ask for supporting evidence of your identity if they cannot verify it from your initial application. This inability to verify may be due to a lack of electoral roll evidence or a lack of credit activity. This supporting evidence could be a copy of a utility bill, driving licence, passport, bank statement etc.
You will be asked to supply your address/es for the past 6 years so that the credit reference agency can show you everything that a creditor is able to see about you when doing a credit check. You don’t have to give the dates when you were resident at those addresses to the credit reference agency and if your credit report does not have one of those addresses listed already, by providing it, you are allowing the credit reference agency to add it to your list of previous addresses.
You don’t HAVE to give a previous address just to get your credit report (unlike when applying for credit, if you’ve lived somewhere less than 3 years). However, if you don’t provide it, then you won’t be sent any information held about you at that address. The credit reference agency merely uses the addresses you supply to retrieve information listed on its database about your credit activity at the address/es you give. If you were not credit active whilst in prison that ‘address’ is irrelevant, so you could apply just with the address you are happy to go on record. However, if there is any financial information at an HMP address, this will not be disclosed on the copy of the report that you receive but may come up in a future application for credit?
It is unlikely that failing to declare an HMP address as a previous address when applying for your credit report would be classed as misrepresentation as it could quite reasonably be argued that:-
- You were asking to see information about yourself only at the addresses you provide
- There would be no credit history listed about you at a prison address (if you were not credit active)
- It is not considered a ‘home’ address
Also, you are not legally obliged to tell a credit reference agency anything: the information it holds is provided by the lenders who share details through its database.
Experian have stated to Unlock that they understand the sensitivities around this issue and, as a result, as long as there is no adverse data at an HMP address, they will happily remove any ‘address links’ between these and your residential addresses. However, to kick start this process, you would first need to get a full credit report to enable them to tidy things up.
Applying for your credit report whilst in prison
Experian are able to provide free credit reports to anybody in prison. Citizens Advice caseworkers and others who work with people in prison on issues surrounding unmanageable debt can obtain application forms to obtain free credit reports for people in prison by emailing firstname.lastname@example.org.
A credit report application form must still include proof of identity. You may be able to use the template contained in PSI 35/2009 (copies available in the prison library) as identification.
Credit score and criminal records
It is impossible to say exactly what effect any information on your credit report will have on a credit application as lending decisions are made by the lenders themselves and not the credit reference agency – although evidence of bankruptcy, County Court Judgments and defaults on loans are not going to help.
Details of criminal convictions are NOT included on a credit report, and therefore, should not directly affect your credit score. However, they can affect you indirectly:-
Closure of a bank account – Banks can close accounts at any time without giving you a reason for doing so. This could be because they become aware of a conviction or because your account becomes inactive for a period of time. The closure of an account may have a negative effect on your credit rating
Prison address – If you had provided a prison address as one that you had been living at, this could flag up to lenders that you have a criminal conviction. We have little evidence to show this happens, but it could technically happen, for example when applying for a mortgage.
Home address – If, as part of your license conditions you have to change address, your credit report could show several different addresses within a short period of time. This may have a negative affect on your credit score as lenders may see this as a sign of instability. In addition to this, not having a fixed land-line telephone number may also have a negative effect on your credit score.
Late payments – If you had debts prior to going to prison, it is important that you make contact with your creditors to inform them of the change in circumstances. Serving a prison sentence may mean that you are unable to meet a payment agreement made with a creditor. Failure to make payments on time will have a negative effect on your credit score, as lenders will see this as a sign of unreliability and poor money management.
Fraud – Information regarding fraud convictions does not have a direct impact on you credit score. However, CIFAS (Credit Industry Fraud Avoidance System) may flag your name up to potential lenders. This information is not used to produce your credit score, but it will be included in a detailed version of your credit report. For further information see here.
Improving/correcting your credit score
Under the Data Protection Act, credit reference agencies must provide you with a “Statutory Credit Report” for a fixed fee of £2. You need to provide your full name, date of birth, current address and previous addresses for the last six years.
The statutory report contains your basic credit file and should be posted to you within seven working days although agencies can ask for further proof of your identity before supplying the information. Each agency will provide more detailed information – including in some cases instant, continuing and online access to your file – for a higher fee.
There are measures that can be exercised in order to make improvements to your credit score. For details see Money Saving Expert. You also have the right to dispute any inaccurate information contained on your credit file. The information collected by credit reference agencies is not always accurate, and as a result of these inaccuracies, your credit score may be negatively impacted. To resolve inaccuracies, you must contact each credit reference agency respectively. For more information visit Experian, Equifax and Callcredit.