Is Credit Correction a Scam?
No! It may be that the company or person offering a Credit Correction service are not very good at it or are indeed themselves ‘fraudsters’ and have no intention of doing anything for you but, no matter what anyone tells you, it is possible to ‘correct’ your credit file.
Can you correct your file yourself?
Yes you can! There are no steps a company or anyone else can legally take to correct your credit file that you can't take yourself. A reputable company however is likely to have the know-how to do the job better than you can do it yourself though they will charge you for the time spent doing so. The reality is that you can obtain a copy of your credit file yourself for a statutory payment of only £2.00. There are two principal credit reference agencies in the UK, Equifax and Experian and they are legally obliged to supply you with a copy of any file they hold on you on payment of the cost stated. Where you approach a company to assist you, they will simply obtain a copy of the same file. Their charge will almost certainly be more but will probably provide for some form of analysis of your credit file and some guidance on what can be done, if anything, to improve your credit worthiness.
Will I be able to obtain credit afterwards?
Not necessarily! Do not be fooled into thinking that correcting your credit files will automatically enable you to obtain credit cards and loans as it will not. There are lots of things taken into account by credit card companies, banks and loan companies in deciding whether to make an offer to you. Your credit file is just one of those things and whilst very important in the decision making process, it is not the only thing a lender relies upon. Each lender has its own set of rules and these rules are not the same and are not published. Sometimes you can be turned down for a loan or credit card believing it is your credit history to blame when in reality, it has nothing to do with the decision; it may simply be that you do not fit a lender’s criteria in the first place.
Does Credit Correction Work?
The plain and simple truth is that sometimes it doesn't work; in many cases it can't work because a person's history is simply too bad and the credit reference agencies files are 100% accurate. What Credit Correction can often do is improve the perception of you as a risk by various means and this can include removal of county court judgements from your credit file (though only in very exceptional cases) and they can also remove defaults (though only with the agreement of the creditor whose consent will be needed). They can place explanations on file as to why a situation arose to cause a particular problem and this of itself can improve your file. They cannot offer guarantees that their programme will give you good credit.
If I am approached how can I identify a Credit Correction scam?
- Look at the source of the approach. If it came by e-mail, be very wary.
- What exactly are you being offered? If they say they'll be able to erase your bad credit history, don't believe a word. They cannot possibly tell you what they can achieve without first seeing your credit files and even then will need to have some input from you before they can reliably comment on precisely what they can do. If you have bad credit, there are steps that can be taken, but nothing will happen instantly.
- Do they ask for an upfront fee? They may well do but it should be relatively small and sufficient only to cover their costs in getting hold of and analysing your credit files. Do not pay up front for any correction work promised; wait until the full analysis is done and you can get a greater assurance of the actual work which can then be done to help you.
- If the corrector suggests supplying false information on a credit application, do not listen. To do so would be a criminal offence for which you can be prosecuted and possibly imprisoned.
- Are the correctors offering a loan? If so be careful. Read the terms carefully and you will in all probability find the interest rates are outrageous, and the repayment plan difficult to meet.
If you decide to Do it Yourself here are the steps you need to take to Improve your Credit Rating yourself.
- Start by requesting a booklet called "No Credit?" from the Office of the Data Protection Commissioner.
- Order a copy of your credit file. There are two main credit reference agencies in the UK – Equifax and Experian. You can obtain a copy of your file for £2. Do not be afraid to challenge entries you think are wrong. You can make amendments to your file, and have incorrect information erased. Alternatively you can have a note added to your file stating why you believe an entry is incorrect.
- If you've had a county court judgment against you and you have settled that debt within a month, it should be removed from the court records and credit files although the history of the debt may not be deleted from your credit file.
- Where a Judgment is paid more than one month after it is imposed it can be marked "satisfied" after you apply to the court for a certificate of satisfaction. The court will then pass the information to the credit reference agency. If you believe information of a judgment is incorrect, the court can give you guidance on having it changed.
What if I decide not to do it myself?
- Be careful which firm you choose. Look for someone who has been around for a number of years, preferably a Company of long standing rather than an individual.
- Ask them if they are ‘regulated’. This will not be as a credit corrector as this is not a ‘regulated industrial sector’; they may however be regulated in some other sector which of itself may give you some confidence. For example solicitors are regulated by the Law Society, accountants by their own regulatory body, Company Incorporation Agents being regulated by HMRC and some firms by the FSA.
- Be very wary of anyone making cast iron guarantees very early in the correction process.
- Ask them to provide evidence of any past successes claimed. A reputable firm will not be short of good references and will probably have arrangements with some former clients to use their ‘thank you’ letters in this way without breaching data protection legislation.
- Compare costs and do not be afraid to ask for quotations in writing.
- Make sure you understand fully the terms and conditions which will apply and if in doubt get the Company to explain it again.