Caught in a bad credit report trap

[Ann Chovie]

Hi has anyone been in this situation and if so how can you escape it?

My daughter has (for the third time in two years ) been told that she must leave her rented accomodation as the property is about to be sold.

She and her partner are both employed full time and have no debt whatsoever and are eager to consider buying now instead of renting as their experience has made them feel vunerable in rented.

The problem they have come up against is that last year they had a dispute with British Gas over an unpaid bill for the tenants who had lived there previously. During the time that they lodged a dispute against the payment they refused to pay their gas bill. As a result of this they now have a default on their account which is showing up on their credit report even though they later paid all the outstanding money. This has resulted in them being credit blacklisted.

My daughter assures me she has been in contact with British Gas repeatedly by email, phone and letter to request that this default detail is lifted but her request has been flatly refused. She has also approached the Ombudsman who says they are within their rights to impose and retain this default for six years.

Their own financial advisor has assured them that on their joint salary they will would have easily secured a mortgage but with her credit black listing his income alone will not be sufficient. He has basically shrugged his shoulders and agreed that the situation cannot be helped and that they should 'just keep renting for five more years until the default has been removed'.

It seems ridiculous to me that just through entering a dispute with British Gas -which incidentally was the companys error- my daughter is now precluded from getting a mortgage. She has a very decent income and I would have thought they would have bitten her arm off!!!

I am particularly eager to resolve this issue as it feels like a watershed moment in their lives where they finally seem ready to change direction after years of what to be quite honest..has felt like dragging their heels.

They have manage to pull together offers of help towards their deposit and are otherwise good to go.

I thought I would be able to answer this one myself , working at CAB , but everyone seems to be of the same mind. I just think there must be a way around this dilemma. I do not want her renting for a life time and would love to see her settled in her own property.

 

[shyvas]

I don't have the answer to your question however has she tried to improve her credit report status via Experian ?

It is always a mistake not to pay outstanding bills when you have a dispute with a firm. It is wiser to get some legal guidance first.

http://www.experian.co.uk/consumer/experian-credit-report.html

 

[Second Summer]

Could she just change her name? If they're not married yet, this may be a good time! Meh, that probably wouldn't help, would it?

 

[Moll Flanders]

It is always a mistake not to pay outstanding bills when you have a dispute with a firm. It is wiser to get some legal guidance first.

I agree. I think this must be a common problem as we had an outstanding bill on the electric when we moved into our house from the previous occupier but we paid our bills until they resolved the issue.

Ann Chovie - I would ask the question on the MoneySavingExpert forum as I always look there first for any type of financial or legal advice.

 

[Pirate]

My sister and her fiancee did part rent part buy. They had to submit two YEARS worth of bank statements, this picked up that his parents had given them some money (£1000, because they knew they were soon getting some inheritence money so could part with it). So they then needed 2 years worth of their bank statements. and a letter explaining that it was not a loan it was a repayment of money he had leant them before (if you need to be given money by the in laws youre not financially stable apparently so they were told not to put that). So yeaaaah I dont think changing your name would help, they want to know EVERYTHING. And lesson learnt if someone offers to lend you money for a house just ask for a huge ikea voucher haha.

Sounds pretty shitty though. I am not too knowledgeable but know the Ombudsman would probably not say something without good reason, they are impartial. I do also know that the ombudsman's decision is final for the company but not for the customer, you could still take it to court (although i have no idea how realistic this is).

I didnt know it is best to pay bills first, I guess paying them then getting a refund (and risking not getting one) is better than being quids in then being blacklisted. I probably wouldve done the same. Will remember that one.

Best of luck to them.

 

[Clueless Git]

Hello my little sugar plum dumpling

Good article here: http://www.thisismoney.co.uk/money/...5131/Improve-credit-rating-history-score.html

Quick bit of web-ferreting suggests that the only thing they can really do is build up some positive score to offset the bad.

One 'trick' for doing that here ..

Use a credit-builder prepaid card
Some prepaid cards have a credit-building option that can improve your credit score. The way this works is you are ‘loaned’ an amount, usually £60, by the prepaid card company. You sign a credit agreement and agree to pay the card company a monthly fee of £5 a month to repay your £60 ‘loan’.

At the end of the year, providing you have not missed any fee payments, this will be recorded on your credit report as 12 months of successful repayments.

However, bear in mind that all prepaid cards charge fees. For example, you might pay £5 to get the card in the first place, 2.5% on everything you spend and an extra £1 fee whenever you top up. Shop around to see if you can find one with fewer fees.

https://www.moneyadviceservice.org.uk/en/articles/how-to-improve-your-credit-rating

 

[Calliegirl]

Isn't it up to the underwriter whether or not the loan is approved? When I was buying a house many years ago, they weren't going to approve the loan because of the long commute to work. I had to write them a three page letter explaining how I would commute and how I would cover all problems that might arise and I was approved.
Couldn't they do the same thing? Talk to the underwriter and explain the situation?

 

[Ann Chovie]

Thanks everyone for your advice

Having checked with those ' in the know' at work it does certainly seem that she is stumped. Her biggest mistake WAS indeed withholding normal payments on her own account while she was in dispute with British Gas as this is the cause of the default.

The advice I have been given by 'the oracle' at work is that you must treat the two issues as separate and pay your normal monthly useage bill and not use the dispute about past/or wrong attributed bills as a reason not to pay normally. The are two different issues and your failure to do so only gives them an excuse to slap a default on you and drag their heels with addressing the other issues.

Funnily enough..I was telling a friend about this today and he told me that he is witholding payments to Scottish Power for the same reasons. He told me that he is being attributed with the bill for the previous tenant and after emailing he was given a number to ring and discuss. He informed me that he sat and sat trying to get through on the phone but was kept twenty minutes each time waiting to be answered. He gave up ringing and decided to get their attention instead by not paying his normal monthly bills. I explained to him that this will only result in the same situation that my daughter is now in..which is equally important to him as he is looking to buy a house himself!!! Hopefully now that he is alerted, he is will prevent the same situation in time!!

Working in benefits I know that failure to reach anyone by phone is no excuse. The client is expected to continue to ring and ring until they get to speak to an advisor. Client without the funds to do so will spend hours on their mobiles burning up precious minutes pressing one , pressing two etc hoping to resolve their issues. Often one of the first things we do with them in interview is to use our phone to make all the calls need to preserve their mobile minutes.

Meanwhile...My daughters situation has become more time sensitive now so she will not have time to pursue this further.

Her landlady announced Sunday without warning that she wanted to sell up and has rung her today to ask if she is able to bring an estate agent round for valuing at the weekend!!!We thought my daugther was being given more warning than that. Everywhere she has seen to rent so far is either in the region of £850-£900 per month or wont let her take her dog.

 

[Ann Chovie]

Hello my little sugar plum dumpling

Good article here: http://www.thisismoney.co.uk/money/...5131/Improve-credit-rating-history-score.html

Good evening to you too monkey brain

The bit about property rental seems to stack up with the advice from the financial advisor that renting for several years and building up a good history of continual rental payments will eventually help towards her credit score.