The Truth About Credit Searches

Friday, 17. February 2017

Hi, Graham Hill here, thank you so much for visiting my blog, I hope you learn a lot and as a result end up driving a great car. In order to do so you can get all the information you need by buying my book, An Insider Guide To Car Finance or use me to finance your next car. Happy driving.

After a spate of adverts on the TV in which various lenders suggest that they can carry out a search to see if you are eligible for a loan, without leaving what is known as a ‘footprint’ on your credit file, many questions have been asked by customers and those on my blog regarding theses searches and their own credit files. In general they want to know how this can be done, are our searches recorded and what is the purpose of having searches registered on your credit file if some lenders are apparently ignoring the rules?

 

OK let me explain. First of all the rules are very clear, if you make an application to a lender for credit, which will cause a lender to access the information held on your credit file, they will register the search with the agency. More on this later. However, the rate you are charged for finance is often based on your credit status so to help the industry and avoid you suffering as a result of ‘shopping around’ a new search was introduced known as a ‘quotation search’.

 

This is different to a credit application search, known simply as a Credit Search. All Credit Searches are available to anyone who has access to your file after you have given them permission. But only you can see the ‘quotation searches’, none of these searches are available to lenders or anyone else accessing your credit information such as potential employers, association membership applications etc. Each of the three UK credit reference agencies, Equifax, Experian and Call Credit will list all ‘credit searches’ on your credit file once you have made an application for credit.

 

However, this encouragement to ‘shop around’ is promoted in the knowledge that whilst attempting to get to the best rate through lenders or brokers, your credit score won’t be penalised. That seems reasonable. However, lenders and credit card companies are using this loophole to drum up business. Now don’t misunderstand me, I’m not actually opposed to some form of pre qualification as it can save a lot of pain. If you are pre-qualified on the finance you will know, before you get excited over the new car you’ve chosen, if you will be offered the finance to acquire the car and the car salesman won’t waste time showing you cars that you can’t finance.

 

But it’s the abuse of the system that I, and many others, object to. There are some lenders and search agents that will offer to carry out a free credit search for you to see how your credit stacks up and your likelihood of receiving the loan you are thinking of applying for. But having carried out the search you are then inundated with offers of  ‘Pre-approved’ loans and credit cards. Not, in my opinion, in the spirit of the FCA regulations to treat customers fairly etc.

 

Anyway, let’s get back to the recorded searches and their affect on your credit. Different lenders have different attitudes towards the searches. If you have a number of credit searches on your file within a very short period of time, i.e. several over a few days they will approach your application with caution as it could be that you are applying for credit to many funders at the same time that could take you out of your affordability range.

 

Of course several searches could be the result of several applications being made around the same time. As the approval doesn’t get registered on your file, only the loan when you draw down the amount borrowed or, in the case of HP, when you take delivery of the car, the only way that lenders are aware of each other is via the searches. So whilst imperfect they can act as a warning.

 

For example, let’s say you have had agreed 5 different loans from different lenders, you could arrange draw down on the same day and only after that would each lender be aware of the other, so that’s why searches are important. To avoid the lender believing that you could be doing this make sure that if you are ‘playing the field’, when you ask for a quote the lender is only carrying out a quotation search. You should also be aware that when searches are registered they are only registered with the agency that the lender uses. In other words there is no sharing of information between credit reference agencies, so if the lender searches Experian the search will only be registered with them, not with Equifax or Call Credit.

 

Of course some of the larger lenders will search all three platforms, especially if the loan amount is substantial. When checking your own files, there are new agencies such as CheckMyFile who purport to check all the platforms for information on you but I’m unsure about the accuracy but in the meantime, because of the way the systems work you may find information on one platform about you that doesn’t appear on another. This is what one of the agencies said to me:

 

However, please know that the information held by xxxxxxxxx is dependent on what is shared with us by lenders. Not all lenders share account information with all credit referencing agencies, and so it’s possible that we may not hold any information at all about a particular account. This is why we recommend that you check your credit report with all three major credit referencing agencies, in order that you can get a complete view of the information held on you.

 

So much for the adverts on TV enticing you to check your credit score with them. If you are just going to check one it might be useful to know that 76% of lenders use Experian, 54% use Equifax and 30% use Call Credit. Why doesn’t this add up to 100%? Because some lenders search 2 or all three platforms. The Moneysavingexpert has helped out by listing the various lenders and which credit reference agencies they use. So if you are applying for say a credit card with the Co-op you will see that they only check Experian so that’s the one you need to check out. Here’s the link:

 

http://www.moneysavingexpert.com/credit-cards/credit-reference

 

There are no legal obligations applied to searches and the amount of time they should remain on your file but for information credit searches remain on your Experian and Eqifax files for 12 months whilst they remain on Call Credit for 2 years.

 

Oh and as a couple of final thoughts, firstly if you are looking to take out a loan, thanks to the EU Consumer Credit Directive of 2010 those advertising representative APR’S must be seen to provide 51% of all customers with the rate advertised. This changed from 66% under our own UK legislation so the EU has provided banks and other lenders a licence to print money. And to prove my point, in an advert on Barclay’s Bank website they advertise a personal loan of between £7,500 and £15,000 at an APR of 4.9% Representative over 2 – 5 years. It also says rates may differ with a tiny 3 attached to it. This is what tiny 3 says right at the bottom of the page:

 

  1. The rate you’re offered may differ from the representative APR shown – and will be based on your personal circumstances, the loan amount and the repayment term. The Barclayloan advertised here is available over terms of between 2 to 5 years, with a maximum APR of 26.9%.

 

Wow, bit of a difference eh! And as they only need to provide the 4.9% APR rate to just 51% of the customers how many of the other 49% do you think are having to pay closer to 26.9% than the 4.9%? Hmmm!!

 

Secondly, and finally, there is confusion over your ability to obtain finance and your credit score. Having many credit searches on your file will, in many cases, drop your credit score slightly. So your score may drop from say 99 out of 100 to say 95. In some cases I’m told that your credit score won’t be affected at all but this doesn’t mean you can finance a new Ferrari on a take home pay of £2,000 per month.

 

And this is where the more important score comes into play, the underwriters ‘Score Card’. This score takes into account many other things such as where you live, what company you work for and the industry you’re in, how long you’ve been in your current job, number of dependents and of course your income along with many other factors, put together by each individual lender.

 

It is this scorecard that determines whether you will be advanced the money or not, not your credit score which is just part of the equation. By all means make sure that you look after your credit and maintain a high credit score but remember that a high credit score doesn’t mean auto accept on anything you want to finance.

 

Absolutely finally if you find that you have applied for credit at several dealerships over a few days then changed your mind, or applied online, not for a ‘quote’ but actually for the finance to several lenders, leaving a string of Credit Searches on your credit files, make sure that you explain what happened on each of the 3 credit agency files by posting a ‘Notice of Correction’.

 

Explain that you have been test driving cars and each time was talked into checking if you could be cleared on finance by their lender or if you have been applying for finance online and again not realised that search footprints, left behind, might affect your credit score, post a note to this affect. If you do this it forces an underwriter to check your file rather than rely upon the autoscore to either accept or reject your final application.

 

In fact the same applies if you have some negative activity on your file (defaults, arrears) as a result of say a marriage breakup or redundancy, you have 200 words to explain what happened and that you are now on top of things (if you are). It could certainly help your application if the problems took place some time ago, Just thought I would mention!

By Graham Hill

 

 

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How Secure Are The Apps That Control Your Car When Sold On?

Thursday, 25. August 2016

Years ago Ford had a reputation for announcing new models long before they were in a position to launch. As a result pressure was on them to get the car into the marketplace whilst interest was at its highest. Subsequently, anyone who bought the brand new model with lots of new features became Ford’s own testers.

My ex wife became one of them when they brought out a brand new shape Fiesta. It looked great and the Ghia had loads of brand new features. Unfortunately the car spent more time in the local dealers during its first 6 months than in the hands of my ex.

But as newer cars rolled off the production line all of the faults were fixed and eventually my ex ended up with a car without rattles, windows that worked, no oil leaks and a rear window that didn’t drip water onto her shopping every time she operated the rear wash/wipe. Whilst it was irritating there were no health and safety or security issues just minor irritation that got sorted. Scoot forward a few years and you find Apple uses the same principle whenever they have a new iPhone to launch.

Remember the bendy big phone and the phone with the aerial built around the phone that lost the signal if you held it? So it should come as no surprise that when the recent head of steam started to build up around the desirability to have ‘Connected Cars’ that stuff would be released before being fully considered and fully tested. What us cost accountants would refer to as the ‘what if’ considerations. Many manufacturers have rushed to release apps that can be downloaded onto your phone that will remotely connect to your car.

The app will remotely monitor and control the car, locate it and even lock and unlock it. Yes I did just say that. The trouble is that not enough ‘what if’s’ were considered before the products launched leaving the new owner and the car vulnerable when sold. Fleet operator Ogilvie found that they still had access via their apps to a Tesla, BMW i3 and a Nissan Leaf after the cars had been sold although they pointed out that the Nissan could not be stopped or started via the app.

As more manufacturers join Jaguar Land Rover with their inControl, Tesla with MyTesla, Volvo OnCall, Vauxhall’s OnStar and Nissan Connect less attention could be given to security if it meant that the technology could be launched in no time flat. Some manufactures say they will delete the old account once the car is sold and one amazingly said that if they are called by the customer or fleet manager they can disable the App. Really? That sounds pretty secure – not! Tesla said that it is up to the old owner or new owner (or thief) to advise the change of ownership.

To prove the point Fleet News reported one ex Tesla owner able to access his MyTesla account a year after the car was sold. It is only now that leasing companies are discussing the end of lease procedures and a resolution that would see the disabling of apps. As part of the handover process. But what about private owners? Who will instruct those with Connected cars how to protect their privacy and new owners make sure that the previous owner no longer has access to their car. What a mess! By Graham Hill

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Does Your Car Have The Right Number Plate?

Monday, 12. January 2015

Having a blog means that I get to hear some very dopey stories. The latest was a car that was delivered by transporter to a customer. As excited as he was about driving his new car something wasn’t right.

Thinking of a change but unsure as to the best way to finance your car? Then you need a copy of my car finance book, Car Finance – A Simple Guide by Graham Hill. Click on the link below to buy the best car finance book on the market, available as a Kindle Book and Paper Back.

He couldn’t put his finger on it but each time he walked towards the car a bell was ringing in his head but what was it? He walked all around the car trying to find a dent or something obviously wrong but could find nothing. After two days of driving the car he realised what it was, there was something wrong with the registration number.

He checked his agreement and realised that the car had been issued with a different number to his agreement. As it turned out there were two identical cars on the transporter, delivered on the same day to two different customers. Whether the dealer had issued the paperwork incorrectly or the delivery driver dropped the cars off to the wrong owners I couldn’t get to the bottom of, but as both cars were insured by the drivers on the other’s registration neither were insured to drive the car they were driving.

The fact is that they may never have known until the cars were returned or sold – how crazy is that? The other driver didn’t have a clue but apparently went loopy when he was told! And I don’t blame him!

The two drivers had their cars swapped and received a free first service. So when you have your car delivered check that the registration number agrees with your documents. By Graham Hill

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Graham Hill’s Advice On Preparing For Credit Part 3

Monday, 22. September 2014

OK, we are now on the final straight, I am now going to talk about the finance application itself. But before I discuss the content there is an overriding requirement on you to answer each question accurately, if you don’t and you are found out, then you could be considered to have acted fraudulently.

Thinking of a change but unsure as to the best way to finance your car? Then you need a copy of my car finance book, Car Finance – A Simple Guide by Graham Hill. Click on the link below to buy the best car finance book on the market, available as a Kindle Book and Paper Back.

I have searched everywhere and sought legal advice but can’t find anywhere that you are committing a criminal offence when providing incorrect information on a finance application – unless of course it was the result of identity fraud/theft, which is a criminal offence and will land you in nick for a fairly substantial time.
However, the industry has gotton around this issue of fraudulent applications by subscribing  to something called CIFAS (Credit Industry Fraud Avoidance Scheme). If a lender suspects (with very good reason) or finds that you have committed any form of credit or insurance fraud they can enter your details on the CIFAS register which then also appears on your credit file for all lenders to see.
The information held is supposed to be considered advisory – alerting any potential lender to look at any application from this applicant more carefully. It can also protect you if it is known that someone has tried to make a false application by stealing your identity. They say that this is more address based than individual but I would take that with a pinch of salt!
The credit reference agencies (CRA) are not allowed to incorporate the CIFAS warning into the automated credit score nor is it to be considered to be ‘adverse’. Lenders should also not take into account CIFAS alerts when making a credit decision, simply carry out more checks on the applicant.
CIFAS goes to great lengths to explain that a CIFAS warning on your credit file won’t affect the decisions of lenders to agree a loan but in the real world if another lender has reported some fraudulent activity on your part it would certainly influence my decision if I was an underwriter and without doubt it will influence theirs.
If you are advised of a warning (you should be told before it goes on your file) or see it on your credit file, if you are not happy then write to CIFAS and the company placing the info. on your file. We are now onto the application having explained the importance of being honest. The next most important thing to do is to give as much information to the lender as possible.
You read a lot about your credit score with lots of advice surrounding your credit report, which I don’t disagree with, but just as important is a mysterious measure, used by all lenders, called the ‘Score Card’. It is the lenders’ score card that initially provides an instant acceptance or an instant decline when you make your finance application.
The problem is that the way each application is scored is so secret that often the underwriters don’t know how it is created but like the credit score on your credit file it is simply a load of points for different items on your credit application added together to form a numerical opinion of your credit worthiness.
Most lenders will have a risk committee who decide what points to award each item on the application but one thing is for certain if they don’t have the information they can’t give you a score so tell them everything. A good broker will be of great assistance as he will know which lender is most likely to approve your application. The cheap bucket shops will just propose you and hope you get through. If you don’t they often don’t have enough profit in the deal to waste time trying to get you through.
Reverting to an alternative funder or through another broker at this stage could well lose you the deal as each search on your file drops your credit score. When you complete your application form, either in handwriting or online make sure you answer every question and make it as easy as possible for the underwriting staff.
Don’t forget those that deal with your application are human beings and if they get frustrated because they can’t read your writing they may omit something that costs you enough points to result in a decline. Use capital letters and make sure your form can be read easily if completing the form manually. Each question is there for a reason so make sure you provide answers to every question. If you have middle names – show them. It helps when carrying out a credit search to find you.
Make sure that you put your correct date of birth and it is legible. These two pieces of information are used to generate a copy of your credit report and verify your current address. Most lenders now require 5 years of address history, don’t say you have been in your current address for 5+ years when you have only been there for 2 years.
They don’t just take your word, this is a verification process as they can see your address history on the voters roll with back links. If you have missed addresses it will cause concern. You should know that if a lender or leasing company is providing a very low APR or very cheap monthly lease rate they have shaved their margins so they will only accept those who are way up their score card.
Those offering higher APR’s or lease rates are more likely to consider applications from those with less than an absolutely perfect credit score. Searching out the very cheapest rate may not be the best thing to do unless you know your credit has been perfect over the last 6 years and that there are no late credit card payments or missed loan repayments or CCJ’s even if satisfied.
Having a great credit score does not mean you will automatically be approved when you make a credit application. Your credit score is based on historical events, your application uses statistics to determine whether you are likely to pay in the future. A few years ago lenders kept an open mind if you didn’t show up at your current or previous addresses as lenders would still record credit information against each of your addresses, irrespective of whether you were on the voters roll.
They would simply ask for proof that you were living at the current or previous address. These days, as the voters roll is much more accurate and is updated immediately rather than often weeks after you have moved, it is more important to make sure you are on the voters’ roll even if you have no intention of voting. Some lenders believe that if you are not on the voters’ roll it is for sinister reasons. Either you don’t want to be found or you are avoiding paying council tax, both of which would put off a lender.
One further point about your address, don’t make the job of the underwriter more difficult by only showing part of your address, omitting part of your postcode or leaving out your postcode altogether. This is often done when providing previous addresses – very irritating! Also, make sure that you show your full address, even though you have named your house Dunroamin, show the number of the property also as the name may not show up in the searches.
The form will ask if you have dependents? The secret is in the name so anyone who lives at your address who depends upon you to live is a dependent. Children or elderly relatives would be dependents as well as a wife who doesn’t work. People think this goes against you in terms of credit score but if anything it improves the score as you have responsibilities so you would take your income and commitments seriously. By the way as each lender is different I am basing what I am saying on information shared with me over the years by lenders, underwriters and leasing company directors.
As I mentioned earlier all lenders have their own set of rules and hence the reason why one company may decline you whilst another accepts you even though you have provided exactly the same information. So when it comes to dependents, having a few is more likely to work in your favour than against you.
The next question and one that is very misunderstood is address status. In other words, is your home owned, rented, living with parents etc. Owning your property will give you a few extra points but you don’t have to own your home for you to obtain credit. I recently funded a £100,000 Mercedes for a customer who lives in a rented property.
There are often times when there is no equity in a property and I have had clients who have sold a property at an amazing price and are taking their time to find a new place whilst living in rented accommodation in the meantime. Many people these days have invested in a holiday home or ‘buy to let’ property. It is advisable to let the underwriter know if you have additional equity sitting in other properties, this information can only add to the comfort given to the underwriter, especially when you are looking to fund an expensive car.
Now to the figures that you show on your application. Be very careful, whilst the underwriter may not place a great deal of reliance on the figures you provide they may ask for statements (mortgage/bank) to back them up and they also have access to data that will give an idea of property values in your area. Your mortgage details are also held on your credit file so make sure that when asked roughly what the value is of your property and what you have outstanding try to be as accurate as possible.
More important to lenders these days is your net income, some will even ask for a breakdown showing net income less your regular expenses. This is not the lenders being awkward, it is a result of the new ‘affordability rules’ imposed upon them when considering an application by the new FCA (Financial Conduct Authority). Be careful because they may ask for last 3 months bank statements or your last P60 and you don’t want either to prove that you are lying about your salary.
Also, if your income is made up of several sources such as a job but also rental income on a buy to let property, pension, annuity etc. make sure you let the lender know. Unfortunately if you use a bucket shop they won’t have time for this which could lose you a great deal.
Marital status is not so clear cut these days as more people find it beneficial not to be married to their partner for tax reasons as well as financial and practical reasons.
Whilst you may still gain a few points for being married or in a civil partnership over being single/divorced/separated it will be minimal but could make all the difference when applying for the cheapest deal where the credit bar is set very high.
Your occupation is a big points winner or loser on your application and yet applicants, as well as some brokers/dealers either treat the question with contempt or for some strange reason consider it an intrusion.
One of the worst job titles used on applications is Consultant because you could be a consultant surgeon or something very obscure like (and I have seen this) a consultant tree hugger. Whilst I don’t know the way that these titles would be scored the chances are that the title consultant will simply attract the lowest score whilst a consultant brain surgeon is likely to be close, if not top of the scale. So make sure that you are specific about your job title. Points are awarded as a result of statistics and the perceived security of the type of employment.
Make sure that whilst your job is rarely checked you describe your job accurately. You will also need to give 5 years job history, again, like moving home, if you move jobs frequently this will drop your score as will periods of unemployment. Beware, if you show yourself as being in full time employment over the last 5 years but you have put information to the contrary on LinkedIn or Facebook there is a vague chance that you could be caught out.
Your bank details need to be accurate and there are various checks that lenders can carry out to ensure that the bank account given is accurate, after all they will be taking direct debits out of this account so need to know that it exists and its status. If your account is in joint names then make sure that you say that on the application and the time with the bank can score an extra point or two with some lenders if you have been with them for a while so if you have been with the same bank for 20 years say so.
Finally we are onto employer details. Lenders have started taking more notice of the company you work for when underwriting. In the past if you have been a director of a company they have always checked out the strength of the business but with the new affordability rules forcing the lenders to take more care more lenders are taking a closer look at the strength of the business and if it looks as though it is on the brink of collapse they are as likely to decline you.
Depending on the size of the deal some will carry out a telephone check so make sure that you include their telephone number. They may even try to speak to you at work on the premise that they are checking details when in fact they want to know that you are working where you say you are (very common with mortgage applications). They are not trying to find out how good you are at your job or whether you were sacked from a previous job, they just want to confirm the information on your application.
In the past a director of a company that has been struggling has put his title down as General Manager or just Admin Manager to avoid having a search on the company but many of the lenders are more diligent these days. So there you have it, answer all the questions on the application form. Be honest and make sure that the form is legible.
Oh and don’t make the mistake that one applicant made, not one of mine of course, he was a plumber and some of his income was cash in hand and didn’t go through his bank. He had a car and a van but wanted to get a car for his wife. He knew that he could afford it but due to his cash business he knew that his bank statements wouldn’t reflect his true income so he said that the car he was getting was a replacement commitment for his own car, a note was made on his application.
As a result the deal was accepted with the condition that the finance company had proof that the finance on his current car was settled – caught out trying to be too clever. On the other hand if the new car is a genuine replacement then tell the finance company/broker/dealer this will help your application. By Graham Hill

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No Tax Discs After 1st October 2014

Thursday, 18. September 2014

Did you know that as of 1st October 2014 tax discs exist no more? It would seem that half the drivers in the UK are unaware of this fact so let me explain what is happening. But before you get excited it doesn’t mean that you don’t have to tax your car it simply means that you don’t have to display a disc which is expected to save the DVLA £10 million each year in this move to go paperless.

Thinking of a change but unsure as to the best way to finance your car? Then you need a copy of my car finance book, Car Finance – A Simple Guide by Graham Hill. Click on the link below to buy the best car finance book on the market, available as a Kindle Book and Paper Back.

It also means that as of the 1st October, if you already have a disc, you can take it out of your windscreen, all part of the announcement made by the Government in the Autumn statement. In addition to no longer being required to display a tax disc there is another move over which car traders and dealers may not be so happy.

Cars used to be sold or part exchanged with a bit of tax left on it either giving the buyer some refund to trouser or giving the seller something to negotiate with when selling her pride and joy. In future, as soon as the DVLA are notified that a car has been sold a refund for the balance of unused tax will be sent to the previous owner. As before refunds will only be issued for complete months that are unused whilst the new owner must apply immediately for the tax using the relevant portion of the V5C.

Another, somewhat strange change, given the way that road tax has been coming down as CO2 emissions continue to reduce, is the ability to pay monthly. Paying monthly will increase the annual cost of the licence by 5% but drivers will be able to pay by direct debit to avoid forgetting and receiving a fine. In what I thought was a funny twist, paper tax discs are still being sent out till the end of September but the DVLA ran out of perforated paper so drivers are having to cut them out themselves.

I can just imagine the dog’s dinner that some have ended up with after attacking the disc with a pair of nail scissors or garden shears! So to sum up: You can still pay for your disc at a Post Office, online or monthly and you’ll still get a reminder. You can no longer transfer the tax, it is automatically refunded when the car is sold or scrapped and the DVLA advised. You will be able to check the tax status of any car by going online and typing https://www.gov.uk/check-vehicle-tax then typing in the car registration and make.

In future you won’t see traffic wardens peering through car windows unless they are being nosey or are perverts. In future tax checks will be carried out by police with plate recognition cameras, wardens will have access to the DVLA database and static plate ID cameras will crop up and will enable the authorities to raise instant fines to those drivers whose cars are captured without tax or insurance.

Driver and Vehicle Licensing Agency

Driver and Vehicle Licensing Agency (Photo credit: Wikipedia)

And don’t forget that you need to do nothing other than remove your tax disc on the 1st October and maybe keep hold of to hand down to your grandchildren for posterity. By Graham Hill

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Graham Hill’s Advice On Preparing For Credit Part 2

Sunday, 14. September 2014

A few years ago ‘Credit Repair’ services had a neat trick set out to defraud lenders. Having found a pile of adverse information on your credit file, that reduced your credit score and would therefore result in an instant decline from all prime lenders, they would set out to ‘repair’ your abysmal file. The process was simple, they would write to the credit reference agencies and dispute every piece of adverse on the file, whether it was a CCJ, default, arrears etc.
Thinking of a change but unsure as to the best way to finance your car? Then you need a copy of my car finance book, Car Finance – A Simple Guide by Graham Hill. Click on the link below to buy the best car finance book on the market, available as a Kindle Book and Paper Back.

As a result, as the information was being disputed, the credit reference agency would remove the adverse information from your file until the company who had placed the information on your file could respond with proof that what they were saying was correct. They Credit Reference Agency (CRA) would also have the Register of Judgements checked to see if the CCJ’s on the client’s file were genuine.
At the time all of this took over 2 weeks. So in the meantime the client’s credit score would shoot through the roof and he would go on a spending spree or even just apply for a car that he desperately needed but for which he had been declined for credit. That can no longer be done. These days if you are disputing anything that is recorded on your file you will need to contact the person filing the information and they must respond within a short space of time with proof that the information is correct.
If you feel the information is still inaccurate you can take it up with the Information Commissioner’s Office (ICO) and they act as arbitrator. CCJ’s are a matter of public record so it is either there or not. But this leads me to another strong piece of advice regarding CCJ’s – don’t be belligerent. If you have been to court and the judge has found against you don’t think – ‘Damn, he can wait for the money’ then wait till the bailiff is about to call before you pay it off or pay an agreed amount monthly when in fact you could afford to pay it immediately.
Provided you pay the judgement off within 1 month the judgement is removed from the register and should not show on your credit file. However, there are certain things you must do to protect your credit. If you pay the money into the court make sure you receive a satisfaction certificate then check your file to make sure that there is no mention of the CCJ. If the CCJ is recorded on your file apply to all CRA’s to have it removed with a copy of the satisfaction certificate.
If you pay the money direct to the person you owe, make sure that you receive a receipt, advise the court by sending them a copy of the receipt against which they should issue a satisfaction certificate and amend the register. Make sure that if this happens within the month the CCJ is removed from the register and there should be no mention on your credit file, if payment is made after the month is out you should send a receipt, received from the company you paid, to the court who should then issue a satisfaction certificate and note it on the public files.
This should trigger a note appearing on your credit file to say that the debt is satisfied, if it doesn’t show on your credit file, send a copy of the satisfaction certificate, issued by the court, to each of the CRA’s and they will check the register and amend your credit file. The same applies if you pay back the debt monthly, you need to make sure that the CCJ is marked as satisfied once all the money has been paid. The bad news is that the CCJ, even when satisfied, stays on your file for 6 years after the debt has been fully paid.
So even though the CCJ is satisfied, the fact is that you received one in the first place. So here’s the thing, because of the changes in consumer regulations it is important to keep your credit file squeeky clean. So do everything to get this sorted before it gets to court and avoid a CCJ. If you can’t pay a debt speak to the person you owe money to and come to an arrangement, it is easier than dealing with debt collectors. If you can’t come to an arrangement with the person you owe the money to and are contacted by debt collectors, again come to an arrangement rather than risk a CCJ by going to court, chances are you will still end up paying the same per month but by paying the person you owe the money to direct your credit score will not be affected by a CCJ.
Make sure that if a CCJ is issued it shows the correct amount and if satisfied you may still have to ask to have it removed from your file after 6 years of being on there. Another great piece of advice is always put up a Notice of Correction against a CCJ. Explain if it was a trade dispute or any special circumstances that may have caused it to be issued. As I mentioned in part 1 a CCJ affects your credit score and can result in an auto decline when you apply for credit. A notice of correction forces an underwriter to look at the file and see what you have said – it could help your case if you have a valid reason for the CCJ, if it was a trade debt not related to credit or if you are applying to have it set aside.
CCJ’s are an important item on your credit report and need to be managed. There are 1,910 consumer county court judgements issued every day so it’s not a small problem. Moving on, let’s talk about your bank statements before moving to the application in part 3. You will probably only be asked for last 3 months bank statements, the problem is they can be manipulated so you may be asked for a P60 which shows your declared income to the revenue. But that is rare so you need to make sure that your bank statements are as good as they can be.
If you have returned (bounced) items showing on the statement, that is a no no, your application will probably be declined. If you have an overdraft and you exceed it or if you don’t have an overdraft agreed and you go into unauthorised overdraft, don’t apply for finance until the last 3 months are clear. This isn’t deception it’s common sense. Having an overdraft and using it is not a bad thing, it shows that the people who know your account better than any, your bank, has allowed you an overdraft and effectively provided credit.
Years ago a credit repair company would suggest that for a 3 month period you should borrow money from a friend or relation and either drip feed it into your bank account to give the impression of higher earnings and a healthier bank balance, paying them back once your credit was approved. Or pay in a lump sum, borrowed from a friend or relation, prior to running off the 3 months statements (that won’t show as a loan on your credit file), which will show a healthy balance rather than an overdraft. It is a weakness in the way that we underwrite for credit.
In order to prepare make sure that you have last 3 months bank statements available. Most lenders will now accept statements produced on your computer if you use Internet Banking but you must make sure that the printable copies show your account details as well as your name and current address. Also make sure that if you scan and email copies you don’t miss any pages, they will check the numbers and request any missing pages or they may just assume that you have something adverse on the missing page and decline you.
You will also need proofs of address so make sure that you have at least two bills dated within the last 3 months. Scratching around at the last minute after the finance has been agreed for proofs of address may not only hold up delivery but also prevent you from receiving the finance. If you are totally paperless it would be wise to request hard copies of some recent bills if you cannot print them off yourself or you have thrown away bills after paying them.
Most lenders WON’T accept mobile phone bills, even though many consumers no longer have a traditional landline. Gas/Electricity/Water/Sewage/Landline Telephones are usually all OK but must be dated within 3 months. Some may accept a bank statement and a credit card statement, council tax bill and mortgage statement but only if dated within 3 months. You will definitely be asked so make sure that you are prepared. Your driving licence will also be asked for.
The most important thing to do is ensure that the address shown on the licence agrees with the latest address on your finance application. If it doesn’t it will cause many problems and not least of which it is illegal. The maximum fine for not having a current address on your driving licence increased this year from £1,000 to £4,000 with three points added to your penalty points. So before making your application make sure that the licence shows your current address and you have the paper part if you have a new style licence.
If you have lost your licence the lender may accept your passport as proof of ID. Again make sure that it isn’t out of date or they won’t accept it. Oh and one funder insists on having your original driving licence sent to them so make sure that your application doesn’t coincide with a holiday or trip during which you may require your licence to hire a car or as proof of ID. By Graham Hill
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Latest Car Scam – But With A Twist by Graham Hill

Tuesday, 6. May 2014

Here is an interesting scam that is apparently on the rise. Crooks are buying cars from dealers, often using stolen credit cards, then selling the car privately to an unsuspecting buyer. When the dealer realises that the payment has bounced the car is listed on the Police National Computer (PNC) and the police alerted that the car has been stolen.

Thinking of a change but unsure as to the best way to finance your car? Then you need a copy of my car finance book, Car Finance – A Simple Guide by Graham Hill. Click on the link below to buy the best car finance book on the market, available as a Kindle Book and Paper Back.

Following this, and often with the use of Automatic Number Plate Recognition (APNR) Cameras the police apprehend the innocent driver and confiscate the car. But there is a question mark over the legality of this confiscation. If a crook stole a car from say a car park and sold it to a third party title doesn’t pass and the owner has every right to recover the vehicle.

However, if a car is sold by someone who has HP on the car and the buyer wasn’t aware of the HP at the time of purchase then he is regarded as an ‘Innocent Buyer’ and title passes but what happens if the car is bought with a credit card and therefore subject to finance does title pass?

The question for the police to answer is, ‘Has the car been obtained by fraudulent means or by theft?’ Theft is clear cut – title does not pass but where the transaction is fraudulent then title can pass to the innocent buyer. The problem for the buyer is that it can be hard to trace whether the car was stolen or not.

You may be able to locate the last owner but he may have sold the car privately, to a dealer or through auction and it could have passed through several hands before ending up on a dealer’s forecourt from whom the car was either fraudulently purchased or stolen.

As always you should  check with HPI to see if the car has been written off or on finance when buying privately, also if the person selling you the car isn’t the person to whom the car is registered check the previous owner and find out who bought the car from him and check that title has passed. Better still lease a new car from me – so much easier and trustworthy. By Graham Hill

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Financial Associations Causing Finance Applications To Be Declined

Friday, 14. February 2014

Most people are aware that in order to be approved for finance you need to have a reasonably good credit score. You maintain a good credit score, as you know, by making credit payments on time (pay by direct debit wherever possible), not gaining CCJ’s, defaulting or going into arrears and not applying for credit to too many companies at the same time.

Thinking of a change but unsure as to the best way to finance your car? Then you need a copy of my car finance book, Car Finance – A Simple Guide by Graham Hill. Click on the link below to buy the best car finance book on the market, available as a Kindle Book and Paper Back.

Closing down old credit cards can also help. But I have had a few ‘declines’ just recently because of financial associations that, in a few cases, were no longer in existance. When you apply for credit you can only have your personal details searched so if you have a partner who has very poor credit or could even be bankrupt, they cannot be checked out unless you give permission or you have a financial association.

If you are shown to have a financial association with anyone the chances are that their credit status will also be taken into account. So if you are applying for finance and you and your partner have a joint mortgage or a joint credit card there is a financial association. One client had a girlfriend and they jointly applied for a credit card and were approved at the time.

They didn’t take out the card and split up shortly afterwards but one of them ran into some severe financial difficulties. As the financial association was still showing on the credit reference agency file the unknowing boyfriend was declined for car finance because of the difficulties experienced by the ex girlfriend.

So check your credit reference files and if you are showing any financial associations with any ex’s make sure you write to the credit reference agencies (all 3) and tell them that you no longer have any financial association with your ex, and to remove the link. By Graham Hill

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Are You As Wary Over Identity Theft As You Should Be?

Thursday, 15. August 2013

Call me old fashioned but I still find it amazing how easily individuals part with their personal details to companies they know nothing about. I write about this time and again and still people are dopey enough to part with every piece of information a crook needs to open a bank account in your name or take out a credit card.

Thinking of a change but unsure as to the best way to finance your car? Then you need a copy of my car finance book, Car Finance – A Simple Guide by Graham Hill. Click on the link below to buy the best car finance book on the market, available as a Kindle Book and Paper Back.

If I wanted details from a number of high net worth individuals I would offer a great car deal on say a BMW X5 or M3, either car for say £299 + VAT per month. Absolutely impossible to get to those figures. I would then set up a dummy web site and wait for the enquiries to flood in.

I would have a very believable person answering the phone explaining how the boss has committed to a number of cars in order to achieve the very low rates on offer, all we need to do is take a finance application from them and away we go.

I would ask for some proofs such as a copy of a driving licence and passport along with a few bills and for good measure a copy of the front and back of a credit card. Oh and by the way last 3 months bank statements wouldn’t go amiss when applying for credit!

It would be that simple as people are greedy, they want everything on the cheap and that is what the crooks rely upon. Oh and by the way the scenario I described isn’t far fetched, it actually happened!

This leads me to the latest figures released by fraud prevention service, CIFAS. In the first 5 months of this year nearly 60,000 people were victims of identity fraud. There were more than 46,000 cases of impersonation over the period where fraudsters used individual identities to open new accounts.

They also showed that more than 13,500 were victims of ‘takeover’ when an existing account is broken into and hijacked. Around 96,000 confirmed frauds were reported to CIFAS in the first 5 months of this year.

By the way the identity theft I referred to earlier was on BMW X5’s, the same company carried out the same fraud when advertising Vauxhall Astras at well under the market rate, so you don’t have to be a high net worth individual.

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Graham Hill Calls For Number Plates To Be Removed From Adverts

Saturday, 21. May 2011

Following on from my campaign to remove number plates from used car adverts online, something considered unnecessary by so called experts, the police reported that £500,000 of fuel was stolen from forecourts in the London area last year by cars fitted with false number plates. Maybe time for a re-think! Have you had your car number plate cloned and received a call from the old bill or a fine that isn’t yours? Let us know? By Graham Hill

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