Equifax provides advice for consumers finding it difficult to get credit because of a lack of information on their credit file

www.equifax.co.uk

London, 20th February 2012 – This weekend’s BBC Radio 4 Moneybox featured the plight of a consumer who had been unable to get a mobile phone agreement because she was not very credit active. The lady in question had what is known in the credit industry as a ‘thin file’. She didn’t have any history of credit agreements which made it difficult for the mobile phone provider to assess her suitability for new credit and, as a result, they declined her application.

Having a ‘thin file’ means there is little data on an individual’s credit file, making it difficult, sometimes, for banks, building societies and other financial services providers to confirm their identity as well as gain an understanding of their ability to manage credit. Neil Munroe, External Affairs Director of leading instant online credit information provider, Equifax, admits that this can be a ‘catch 22’ situation. Someone without any credit can find it difficult to get new credit. But he has some useful advice for others who may have ‘thin files’.

“Thin files are most likely to occur for people between 18 and 20, who have only just entered the credit market or those in their 60’s and 70’s who may not have been very credit active previously” explained Neil Munroe. “Women whose husbands have been responsible for their mortgage payments are another group that can have ‘thin files’.

“For some organisations their automated systems will decline new credit applications simply because they can’t verify the credit status of the individual electronically. It’s therefore wise for those with ‘thin files’ to take a number of steps to give prospective lenders more confidence in their ability to manage credit.”

“First and foremost, make sure you’re on the electoral roll. Lenders will want to be able to verify the identity of the individual, which they do through electoral roll data. Then, if you know you haven’t been credit active, it makes sense to try to create a credit history. To do this, you can go to the bank or building society where you have your current bank account. They will have a picture of your financial history and, therefore, are more likely to extend new credit to you. So by opening a credit account of some sort with them, which you should keep paid up to date, you can start to create that credit history.”

“Another way to create a credit history is to apply to an organisation like a store card provider where they may be prepared to provide credit on the basis that you are buying goods from their store.”

“But if a credit application is rejected it’s important not to keep applying to new companies because this may also affect your ability to get credit”, continued Neil Munroe. “The more times it appears someone has applied for credit in a short space of time, the more likely a lender or organisation extending credit may reject the application because they will be concerned this will be an indication of possible fraud or over-indebtedness.”

“Instead, we strongly advise anyone who is planning to apply for credit, or who has had an application declined, to get a copy of their credit file – so they can see straight away what information is being used to assess them. They also have a right to ask the lender for a reason for their decision.”

“And if the consumer does believe that their lack of credit history is at the root of their inability to get credit, but they have a good history of paying other financial commitments, such as utility bills, then they can add a statement to that effect to their credit file, which lenders are obliged to read. This is called a ‘Notice of Correction’.

Equifaxoffers a free online credit check, where you can view your personal credit report, including any joint agreements you may have. The Equifax Credit Report, with the facility to access credit information for the first 30 days free, gives consumers a valuable insight into their credit status. Accessible simply by logging onto www.equifax.co.uk it is designed to help individuals understand their credit file and see what lenders see to assess new credit applications. It also includes expert tips and advice to help consumers take the right steps to manage their finances and navigate through life’s challenges.

If the customer does not cancel before the end of the 30 Day Free Trial, the service will continue at £6.99 per month, giving them unlimited online access to their credit information and weekly alerts on any changes to their credit file. It also includes an online dispute facility to help them correct any errors on their credit file simply and quickly.

As you have probably seen on the new recently, the main 6 energy suppliers are dropping their prices by about 5 or 6%. Ok, this isn’t really much in the grand scheme of things, but every little helps…………………or does it?

Scottish Power are claiming that if the prices drop now, it will only mean a steeper hike in out costs at a later date. Here is what SP have to say on the matter:

ScottishPower Cuts Gas Bills By 5%

Average annual gas bill reductions of 5%*
Reduction effective from 27th February 2012
For a typical monthly Direct Debit standard gas customer the annual bill will fall by £36**

ScottishPower today announced reductions in its gas bills for around 1.4 million domestic gas customers.

From 27th February 2012, Scottish Power’s domestic customer’s annual gas bills will fall by an average of 5%. This equates to an annual reduction of £36 for both dual fuel and gas only monthly Direct Debit customers.

Announcing the cuts, Neil Clitheroe, Scottish Power’s CEO of Energy Retail and Generation, said:

“Our customers want competitive prices from a responsible supplier. We understand that household budgets are tight in these tough economic times and with this in mind, we are pleased to be able to pass on lower prices and help our customers when we can.

“In October, we pledged not to increase standard prices for gas and electricity over the winter months, extending until at least 1st April 2012. Today’s reduction is being made as part of our commitment to continually review our tariffs.

“Having said that, we have already secured the majority of our energy requirements for this winter. It is important that we do this to ensure we have sufficient supplies when our customers need them and to protect customers from the impact of volatile movements in the wholesale energy market.

“Although there has been a short-term fluctuation in the wholesale gas market that has allowed us to pass on today’s reductions, the global demand for energy is increasing faster than its supply. This will inevitably lead to higher energy costs in the long-term.

“Wholesale charges represent around 55% of the typical gas bill. The remainder of the bill is primarily made up of fixed components such as network charges, environmental, social and regulatory costs.

“To get the most from our new lower prices, we would, as always, encourage all of our customers to contact us to make sure they are on the best tariff for their circumstances. We have a range of products available to suit customer requirements.

“In addition, we would encourage our customers to further reduce their energy bills by taking a few energy efficiency measures such as loft and cavity wall insulation – free of charge for customers that qualify***. We have many ideas for saving energy on our website, Scottish Power”

* 5% gas bill reduction applies to domestic gas customers with average annual mains gas usage of 16,500kWh supplied on the following products: Standard, Discounted Energy (all versions), Fresh Start, Pay in Advance, Online Energy Saver (all versions), SP Direct, Simply Green Energy, Capped Price Energy (some versions excluded) and Unifi Capped Energy January 2014.

** Annual saving of £36 shown is based on an average of monthly Direct Debit standard gas customers across Britain, with annual usage of 16,500kWh. Figure shown includes VAT at the current applicable rate of 5%.

*** We are committed to helping everyone who’s entitled to free insulation get their home insulated. If you are 70 or over or on one of the eligible benefits you could qualify. Eligible benefits include: Attendance Allowance, Council Tax Benefit, Child or Working Tax Credit (income no more than £16,190), Disability Living Allowance, Disablement Pension (includes Constant Attendance Allowance), Housing Benefit, Income Support, Income Based Jobseekers Allowance, Income Related Employment and Support Allowance, State Pension Credit, War Disablement Pension (which includes Mobility Supplement or Constant Allowance).

Due to a lack of spending last month, caused by frozen wages and households tightening their purse strings, the economy took a bit of a hit. Britain’s retail sales dropped by 1.4%, compared to a 1.1% increase in April. It is felt that the rise in April was largely because of the Royal Wedding, our numerous bank holidays, and possibly due to some of the gorgeous weather that we had. It’s likely that it got to the end of the month, we all checked out bank balances and budget sheets, and decided that we need to reign it in a bit during the month of May.

If we aren’t spending money in shops, it means that the stores don’t make many sales, which in turn means they are not ordering products from factories and suppliers, and so on. It results in British businesses struggling and having to lay off staff, which in turn means they don’t spend much…….you get the picture! Circle of life, and all that!

So, what Ed Balls the Shadow Chancellor is recommending, is that VAT is cut, meaning that households feel they are able to spend a bit more, thus helping the economy as a whole.

Of course, it’s not quite as easy as that! By cutting VAT, it means less tax going to the Government on sales, and therefore making our country’s “overdraft” even bigger.

The Prime Minister is refusing to budge on VAT at the moment, but we will have to watch this space to see if others can help him change his mind.

The last time we had a VAT decrease was back in 2008 when it went down from 17.5% to 15%, and this was in hope that it would encourage us to spend our hard earned pennies, helping to get the economy back on track. Of course, as soon as the next government were elected, the VAT increasedagain.

For now folks, I wouldn’t hold my breath, I think the VAT is going to stay as it is, but there is a glimmer of hope for householders that it may drop. however, we also need to think about the country’s longer term monetary issues.

INDEPENDENT ID FRAUD EXPERT AVAILABLE TO COMMENT

ON ID FRAUD RISKS FOLLOWING SONY PLAYSTATION HACKER ALERT

www.equifax.co.uk

London, 27^th April 2011 – Chris Sherlock, Marketing Director of ID Fraud expert, Equifax, is available to provide expert comment on ID fraud and theft issues following the news that Sony has warned users of its PlayStation
Network that their personal information, including credit card details, may have been stolen.

Chris Sherlock, who is responsible for Equifax’s direct-to-consumer services which help individuals monitor for any signs of ID fraud and theft, can comment on the potential risks as a result of this security breach and provide advice if someone thinks they have been a victim of ID fraud.

“Fraudsters only need three items of personal information to be able to steal an individual’s identity” said Chris Sherlock.  “Sony is stating on its official Playstation blog that it believes the name, address, country, email address, date of birth and PlayStation
login and passwords of users have been stolen.  It is also saying that whilst there’s no evidence that credit card data has been taken, it can’t be ruled out.  So Playstation users do need to be alert to the potential threat to their identity and certainly should make sure they’re not using the same PINs and passwords for other online activities.”

In a survey conducted by Equifax*, 32% claimed they use just 1 to 3 PIN codes for all of their debit or credit cards and online accounts.  That means that if a fraudster gets hold of this limited amount of PINs, they could potentially gain access to all of an individual’s finances.  “In the same Equifax survey, 76% confirmed they use their Mother’s maiden name as a password or prompt.  Equifax therefore encourages consumers to avoid doing this as it is quite easy for fraudsters to work out, especially those who know their victim.

EQUIFAX TIPS TO PROTECT AGAINST ID FRAUD ONLINE

• Make sure your computer is protected with the latest virus protection that ideally updates hourly and you that you have a Firewall
  • Check the website address that you are shopping on starts with https:// not http://
  • Check there is a registered address and a landline number on the website
  • Before putting in any of your card details, ensure there is a padlock showing at the bottom of the screen
  • Do not use the same PIN number for all of your cards, and the same passwords for your email accounts.
  • If you are using a public computer ensure people can’t view your details and log out of the site, rather than just closing the window
  • Take note or print out of your receipt/reference details
  • Keep note of all of the online transactions you have made and check your bank statements for any unusual transactions
• No matter how much you trust your friends, work colleagues, do not give out your PIN number under any circumstances

Equifax also recommends that consumers regularly monitor their credit report to be able to identify if any unauthorised activity occurs that might be signs of a fraudster at work.

Tackling the threat of identity theft and fraud, Equifax Identity Watch Pro gives consumers unlimited instant, easy online access to their latest credit file, with automatic alerts within 24 hours of key changes to their credit report.  It costs £7.50 per month.  Or for just £2.99 per month, Equifax Identity Watch Lite makes monitoring a credit report easy by automatically alerting the individual within seven days of key changes.

*Equifax Identity Fraud Survey of 939 Consumers, June 2010

So, the Chancellor, George Osbourne, announced the new budget today. Let’s see what is going up, and what’s going down!

• Personal tax allowance is to rise as of April 2012 to £8015

• Duty on fuel is cut by a penny, and the rise due to take place in April is frozen until 2012

• Tobacco duty rates up by 2% above inflation

• No additional changes to alcohol duty rates but 2% above inflation rise in excise duties for wine and beer to go ahead

• Council tax frozen or reduced this year

• 10% inheritance tax discount for those leaving 10% of estate to charity

• Private jet users to pay passenger tax (going to cost me a fortune!)

• No rise in air passenger duty (unless you use a private jet!)

• Inflation rise in road tax but duty for HGVs frozen

• Support for families in the south-west of England with water bills

• Government backed scheme to aid 10,000 first time buyers

• Funding for 100,000 new work experience placements

So, that’s an overview of this year’s budget. Good to see fuel duty coming down, but let’s be fair, it’s not going to impact us significantly due to the recent price rise(s). Have a look at your local petrol prices

For the full Budget 2011 report, click the link.

There may be some light at the end of the tunnel for first time buyers. Have a look at this press release from Equifax:

The launch of a number of 90% and 95% LTV (loan to value) mortgages in the last few weeks will be welcome news for first-time buyers with a small deposit. But leading instant online credit information provider, Equifax, is advising new homebuyers to check their credit file before making new mortgage applications, to ensure that they have the best possible credit status for the deals currently on offer.

“After the recession, 100% mortgages disappeared and buyers needed bigger and bigger deposits, making it very difficult to get on the property ladder,” says Neil Munroe, External Affairs Director, Equifax. “Cautious lending criteria also meant many consumers were unable to capitalise on property prices.

“The new 90% and 95% mortgages we have seen launched in the last few weeks, however, offer hope for first-time buyers. But it’s essential that anyone applying for a new mortgage ensures their credit file is looking good to give themselves the best chance of getting the best deal.

“In particular first time buyers need to ensure they are registered on the electoral roll at their current address – this is a crucial first check carried out by lenders and if they fail that their chances of getting a good deal could be scuppered straight away. They also need to be aware that if they haven’t been particularly credit active in the past this may have an affect on their ability to secure a good mortgage deal.

“Checking their credit file should be the first step, before shopping for a mortgage, as any refusals or too many searches on a credit file could make it even harder to secure a new mortgage. With a little preparation, homebuyers should be able to place themselves in a good position to gain access to new 90% mortgage deals.”

Equifax advises first-time buyers to get a copy of their credit report to see what the lender sees. As well as checking their electoral roll data and that all their current credit agreements are shown as paid up to date, their credit file will highlight any dormant accounts they might have forgotten about. Closing these will improve their credit status, as will paying off any agreements early.

“The two potential hurdles for a first time buyer with their credit file are a lack of any credit activity or missed payments on previous credit agreements”, continued Neil Munroe. “If an individual has never had any credit before this makes it hard for the lender to see that they will be a good risk. So it might be worth taking out a credit facility some months before making an application for a mortgage. If they make payments on time every month this will show potential lenders a responsible attitude to borrowing. For first time buyers who have missed payments in the past, they can add a Note to their credit file to explain the circumstances of past problems.”

Munroe concludes, “First-time buyers are essential to get the property market moving, but lenders still want to see that applicants are a suitable risk before approving an application. We welcome the new 90% and 95% mortgages, offering a vital lifeline for first-time buyers keen to get on the property ladder, but they will still need to ensure their financial house is in order to benefit from these deals.”

The Equifax Credit Report, with the facility to access credit information for the first 30 days free, is accessible simply by logging onto www.equifax.co.uk. Designed to help individuals understand their credit file and see what lenders see to assess new credit applications, the Equifax Credit Report also includes expert tips and advice to help consumers take the right steps to manage their finances and navigate through life’s challenges.

If the customer does not cancel before the end of the 30 Day Free Trial, the service will continue at £6.99 per month, giving them unlimited online access to their credit information and weekly alerts on any changes to their credit file. It also includes an online dispute facility to help them correct any errors on their credit file simply and quickly.

It has been announced today that Barclays Bank PLC are to buy the Egg Credit Card portfolio from Citi.

London/New York – Citi today announced that it has entered into a definitive agreement to sell its entire Egg credit card portfolio to Barclays Bank PLC. The £1.8bn* of gross assets in the Egg portfolio represents 1.15 million customer accounts.

The transaction does not affect Citibank’s retail offering in the UK or any other Egg products which remain with Citi.

The sale demonstrates Citi’s continued success in reducing the assets and businesses within Citi Holdings in an economically rational manner while working to generate long-term profitability and growth from the core businesses within Citicorp. Citi has reduced assets within Citi Holdings by more than $400 billion since the peak in the first quarter of 2008.

Other terms of the sale were not disclosed. The transaction is expected to result in an after-tax gain* to Citi, on a US GAAP basis, which is not expected to be material to Citi’s net income. The transaction is expected to close in Q2 subject to customary conditions.

Citi is committed to working with Barclays on a seamless transfer of the customer accounts, ensuring continuation of the high level of service to which customers are accustomed.

Citi’s UK Capital Markets, Institutional Banking and Global Transaction Services businesses will continue to provide an unparalleled global footprint and services to its clients, including major companies, financial institutions and the public sector, as well as subsidiaries of foreign multinational companies.

Citi’s Institutional Clients Group advised Citi on this transaction.

*All figures reported by Citi are in US GAAP

London, 2nd March 2011 – Officers from the Dedicated Cheque and Plastic Crime Unit (DCPCU) have issued a warning to commuters and other train users to be vigilant when buying tickets at unmanned machines on the train and tube network. The unit has noticed a rise in the number of card skimming devices being placed on payment keypads, which can take credit and debit card details from unsuspecting members of the public.

The DCPCU has offered advice to rail users on what to look out for when using unmanned ticket machines. But leading ID fraud expert, Equifax, is also urging anyone who is worried that they might have fallen victim to this crime to monitor their credit report regularly for any signs of unauthorised activity.

“The key issue with this sort of crime is that once a fraudster has someone’s card details they could well use it for a variety of fraud activities”, explained Neil Munroe, External Affairs Director, Equifax. “Fraudsters may use the data they skim initially to then secure other forms of finance or goods in the innocent victim’s name.

“Checking credit card and bank statements is, of course, essential. But looking at your credit report too to make sure no new accounts or finance agreements have been set up in your name is also vital.”

Tackling the threat of identity theft and fraud, Equifax Identity Watch Pro gives an individual unlimited instant, easy online access to their latest credit file, with automatic alerts within 24 hours of key changes to their credit report. It costs £7.50 per month. Or for just £2.99 per month, Equifax Identity Watch Lite makes monitoring a credit report easy by automatically alerting the individual within seven days of key changes.

To reduce the chances of train users falling victim to this type of fraud, the DCPCU has offered the following common sense advice:

· If someone close to the ticket machine is behaving suspiciously, use a different one

· If there is something unusual about the machine and you suspect that a skimming device has been attached to it, do not use it and alert a member of staff at the train station or the police

· Use your free hand to shield the keypad when you enter your PIN

· If someone starts crowding or watching you, cancel the transaction immediately and use another machine

“Recent research we commissioned revealed that the unseen threat of identity fraud and theft is the scam that most members of the public are worried about” concluded Neil Munroe. “It appears that people are more concerned about being victims of identity fraud and theft than falling prey to cowboy tradesmen or buying counterfeit goods. It’s the invisibility of these new frauds that is probably most worrying for people. You can’t see it – so you might not even realise you’ve become a victim.”

….There’s a way!

The BBC have today reported that the top 4 high street banks, known as “The Big Four” will be taking a look at the way they sell will writing services, and executor services.

The Office of Fair Trading have commented that consumers were in danger of appointing banks as executors without fully understanding the possible costs.

An “executor” is a person who sorts out the finances of someone who dies, according to the dead person’s wishes.

An OFT survey found that 43% of people appointed their will-writer or solicitor as their executor, and this is possibly down to the fact that people think that it needs to be a professional person, this however is not true.

“The wrong decision when appointing executors could mean a potentially expensive professional service is chosen, when a family member or friend may be quite capable of handling the task either alone or with professional support,” the OFT said.

“We are pleased that each of the banks has agreed to review its selling practices and marketing literature to ensure customers are getting the information they need to make informed choices.”

OFT have said that people can pay anywhere between £3,000 and £9,000 for a professional executor to sort out an average sized estate after their death.

The Office Of Fair Trading are recommending that people shop around, in order to get the best value for money.

Barclays, HSBC, Lloyds and RBS – the only banks to offer will-writing and executor services to their customers – have agreed:

* to ensure clients who make a will are not misled into thinking they must appoint a professional executor
* not to encourage clients to appoint professional executors unless it is “clearly in their best interests”
* to make sure clients understand their choices before their will is drafted

The agreement comes after discussions last year with the OFT. Any changes to the banks’ policies must be in place within six months.

For more on this story and related articles click the link.

I had been reading the news today, and thought I would strike up an intellectual conversation with a friend, so I started by saying “Have you head about the insolvency high?”, to which they replied “Is that something to do with the effects of sniffing glue and lighter fluid?”!!! So I then had to explain that insolvency was being unable to pay your debtors, and basically declaring yourself bankrupt. At that point I stopped talking about the news that I had heard, and thought I would share it on here for those who may live in a world without the BBC, or ITV, or 24hour Sky News!

So, the news that has recently come to light is that in 2010, personal insolvency within the UK hit a high for the first time since 1960. The Insolvency Service has advised us that it has risen by 0.7% on 2009.

So just how may people were declared insolvent last year? Well, the figure is 135,089 – which is enough people to fill the new Wembley Stadium one and a half times! May or may not seem like many, given the population of the UK, but that is alot of families to have had their lives effected by money last year. The stress, the arguments, the cutting out of treats etc etc.

There are three forms of insolvency which make up the numbers we have seen above.

• Bankruptcy: The traditional way of escaping overwhelming debt. Ends after one year, but you are likely to lose all your assets including your house to pay something to the creditors
• Debt Relief Orders: Introduced in April 2009, these allow consumers with debts of less than £15,000 and minimal assets or surplus income to write off debts without a full-blown bankruptcy
• Individual voluntary arrangement (IVA): A deal between you and your creditors, overseen by an insolvency practitioner. Less stigma, less chance of losing your home, but involves paying some of your debts in one go or over a number of years

So what can you do to avoid adding to the 2011 insolvency figures?

Well, there are companies that can help you with your debts such as The Money Advice Group. MoneyAdviceGroup.co.uk offer immediate UK debt solutions from Debt Management, IVAs and Debt Consolidation. They only employ experienced debt advisers, and have helped thousands of clients with financial difficulties regain control of there finances. So, start by having a look at their website to see if they can help you, and whether their service suits your needs.

If they aren’t what you are looking for then there are more companies out there that can help, such as Debt Line who offer the only fully online debt management service in the UK. They are currently dealing with over £215,000,000 worth of the UK’s debt for more than 16,000 customers and their online business is rapidly growing.

Debt management means that Debt Line’s clients stop getting creditor hassle, have a freeze on their interest and charges on their accounts and can relax knowing that all of their debts are being dealt with for them. They ensure that their customers only pay what they can afford leaving them with more money every month and no more struggling.

Of course, one thing to be aware of is that personal insolvency does effect your chances of getting credit in the future. It’s important that you rebuild your credit score.

If you have first hand experience of having to declare yourself bankrupt, or partaking in an IVA then please share below.