Credit Reference Agencies and the Overindebtedness Index

Truffle1234

Although I have excellent scores on all the major Credit Reference Agencies (experian, equifax, and callcredit) I have been refused credit. I have discovered that callcredit and perhaps also the others maintain information to calculate a so called "Overindebtedness Index" which is kept separate from the main file but accessible to lenders. Apparently this is an FSA initiative.
Whilst this is a good idea, I am concerned that the CRAs are not taking this into account in calculating their Credit Scores, so the "excellent" credit scores which they are giving me are meaningless.
I know that all lenders use different methods, but surely the CRAs should take into account information they hold themselves and which they are making available to lenders ? Surely the Overindebtness Index should not be secret ?
Does anyone know how it works/how it is calculated ?

vuvuzela

Their scores are indeed meaningless and should be taken as merely an indication of how experian etc view your data. Real companies have differing interpretations of that same data. I've never heard of this "overindebtedness index", where did you hear about it ? Sounds a bit made-up IMO.

Truffle1234

I read about it in the Credit Report I received from CallCredit in the FAQs

"Does Callcredit hold information about me which is not included on my credit file?

Certain information processed by Callcredit relating to you is not included on your credit file. This includes information relating to an assessment of your potential overindebtedness. This information is held separately from your credit data, and is used to assist contributing member organisations in the calculation of a debt to income ratio which may be used to assess affordability.

What information, held separately from my credit information is used to assess my potential overindebtedness ?

This information has been compiled as a direct result of a Government-led initiative, supported by the Financial Services Authority, in a bid to help with responsible lending to protect consumers. Callcredit has worked with the major clearing banks to help develoo the "Overindebtedness Initiave", which involves the collation and supply of information to all member banks.

The information collated includes values derived from current account credit turnover, plus salary date supplied by consumers during the credit application process.

The contributing banks utilise this information in their lending decisions. Callcredit does not make these decisions; we merely act as a data holder for this information".

Sorry for such a long post.

I am uneasy that there is information held by CRAs which I cannot see, so I dont know if it is correct

Truffle

Fergie76

Truffle1234 wrote: »

I read about it in the Credit Report I received from CallCredit in the FAQs

"Does Callcredit hold information about me which is not included on my credit file?

Certain information processed by Callcredit relating to you is not included on your credit file. This includes information relating to an assessment of your potential overindebtedness. This information is held separately from your credit data, and is used to assist contributing member organisations in the calculation of a debt to income ratio which may be used to assess affordability.

What information, held separately from my credit information is used to assess my potential overindebtedness ?

This information has been compiled as a direct result of a Government-led initiative, supported by the Financial Services Authority, in a bid to help with responsible lending to protect consumers. Callcredit has worked with the major clearing banks to help develoo the "Overindebtedness Initiave", which involves the collation and supply of information to all member banks.

The information collated includes values derived from current account credit turnover, plus salary date supplied by consumers during the credit application process.

The contributing banks utilise this information in their lending decisions. Callcredit does not make these decisions; we merely act as a data holder for this information".

Sorry for such a long post.

I am uneasy that there is information held by CRAs which I cannot see, so I dont know if it is correct

Truffle

As said above, paying for Experian etc credit scores is a waste of £6 or however much it is. If you insist on doing it, can I suggest you pay it to me and I'll give you a random number that will have just as much meaning for when you apply for credit.

Credit companies look at how much outstanding debt you have, before deciding to lend to you or not. You maybe paying your debts back fine at the moment, but the next loan, could be the one that sends you over the financial edge, so this is responsible lending.

With regard to not seeing the information, try a Subject Access Request and they cost £10 (although I don't know if CRA's have to divulge anything other than your Credit Report):

Subject access request (Data Protection Act)

Under the Data Protection Act, individuals can ask to see the information about themselves that is held on computer and in some paper records. If an individual wants to exercise this subject access right, they should write to the person or organisation that they believe is processing the data.

A subject access request must be made in writing and must be accompanied by the appropriate fee. In most cases, the maximum fee will be £10, but this can vary, particularly if the information requested is for health or educational records. If a subject access request is made to a credit reference agency for financial information (ie a credit file), then the fee is £2, and the information must be provided within seven working days. A request must include enough information to enable the person or organisation to whom the subject is writing to satisfy itself as to their identity and to find the information.

A reply must be received within 40 days as long as the necessary fee has been paid. A data controller should act promptly in requesting the fee or any further information necessary to fulfil the request. If a data controller is not processing personal information of which this individual is the data subject, the data controller must reply saying so.

For more information, please see our pages on how to make a subject access request and how to respond to a subject access request.

Truffle1234

Thanks, I will try a Subject Access Request.

I accept that the credit scores dont reflect a decision that a lender would make, but if the credit scores offered by the CRA's dont take into account information which they themselves hold, isnt that misrepresentation ?