Just the sound of the word “Blacklisted” seems to strike fear into the heart of many people. However, most people do not really know what Blacklisting means. Being credit blacklisted is just another way of saying that lenders do not want to lend you more money. This is generally because you are currently struggling to repay what you have already borrowed or have failed to repay debts in teh past.
How Could I Be Blacklisted?
If you have borrowed money in the past – perhaps a bank loan, credit card, store card or even a mortgage, then this information is recorded on a central credit file held by a Credit Reference Agency. The largest agencies in the UK are called Equifax and Experian. The file records information about each different account you have opened – normally who the lender is, the outstanding balance and a history about whether you have made your repayments on time and if any have been missed.
If you have been late with any of your payments or have missed payments completely, these details will be sent by the lender to Equifax and/or Experian and recorded on your file. Then, if you apply for more credit – perhaps a new loan or catalogue credit, the new lender will be able to access your credit file to check if you are keeping up your payments on your current borrowing.
The new lender will normally only be able to see the history of your repayments, not who is owed money and the balances. The new lender will use this information to help decide whether they should lend you more money. Clearly if you have recently missed payments and/or are behind with your payments, this may count against you. The new lender may decide that you are already having problems with your current debt and do not want to lend you any more. They may therefore turn down your application as a result. Click here to find out reasons why you might be refused credit.
How To Check Your Credit File for Problems
Each time you take credit, this information will be registered by the loan or card company with one or both of the credit reference agencies, Experian and Equifax. Each time you make or miss a payment, this will be recorded on the file that the agencies hold about you. Anyone can request a copy of their credit file to see what information the credit reference agencies currently hold – you do not have to have been refused credit to do this. You will only be able to repair your credit history by getting hold of a copy of your credit file.
Correcting Your Credit File
If you think that any of the information you have been sent by the credit reference agency is wrong, you can ask for it to be corrected or removed from the file. You need to write to the agency telling them what you want them to do. You should explain why you think the information is wrong. Click here for more information on repairing your credit history and credit repair.
If you write to the agency in this way, they have to reply within 28 days. Their answer will tell you whether they have corrected the information, removed it from their file or done nothing. If the file has been corrected, you will get a copy of the entry. If the reply states that the agency has done nothing or if the information is corrected but you remain unhappy with the correction you can write your own note of correction (no more than 200 words) clearly explaining why you think the information is wrong and ask for it to be included on the file.
Facts About Blacklisting
Will Other Members of My Family Be Affected? If you have had problems with repaying your debt, this should not affect other members of your family or other people who you live when they try to gain credit for themselves (unless they are also named as responsible for your debt). However, where people are living at the same address and particularly where they have the same surname, it is possible for information about one individual to be mixed up with another’s credit file. If people that you live with have been refused credit, the first action they should take is to request a copy of their credit file. It may be that they have problems of their own. However, if they find information concerning another individual on their file, they can request that it is corrected as described above. Read what to do if you want to create a disassociation on your file and are leaving home, divorcing or separating.
Will I Be Blacklisted For Ever? The answer to this is no. However, if you have experienced problems especially with the repayment of credit you will normally have to resolve this before lenders are prepared to give you additional credit. Different loan and credit card companies have different lending criteria. Some will only look at the recent past history while others will look back much further. Others will be willing to lend despite recent repayment difficulties. It is useful to realise that even if you have had problems with repaying unsecured debt such as a personal loan or credit card, this should not preclude you from taking a mortgage. There are many mortgage lenders who will provide a mortgage without the need for a “squeaky clean” credit file. However, their charges and rates may be higher than a standard high street lender.
Can My Rating Be Repaired? There are a number of companies who claim to be able to repair poor credit ratings. Be very careful of such claims (and beware of bogus credit repair companies). The only way to improve your credit rating is to resolve any issues with your current lenders. This will mean undertaking some kind of debt repayment or settlement plan. The credit reference agencies will normally not make changes to your file without the agreement of the current lenders that the change is factually correct.