Applying for a mortgage with an incorrectly assigned credit default

obertray

In January this year I started looking to buy my first house.  Before I went down the route of applying for any sort of mortgage, I checked my credit score with Clearscore.  This showed that I had a credit default against me from Scottish Power for £1,200.

The credit default against me was because of an unpaid energy bill from 2015 when I was a student.  I agree that the energy bill was never paid, however this was because Scottish Power never sent one, nor made any effort to correctly create a bill when we moved out.  No post was ever forwarded to me and they had my contact details.  I still have evidence (email, postal letter and twitter message) clearly stating when I was moving out of the house and what the meter readings were.  Each time I was met with the same excuse of "the previous meter number was never updated, so we cannot issue a bill until it is."  The meter was installed in April 2015 (we lived in the house August 2014 to July 2015).  When installing the new meter, it was found that the previous meter before that was never registered as installed either.  I sent them a final email with my forwarding details in July 2015 when we moved out, with photos of the meter readings and serial number.  I heard nothing else until December 2017 when I received a debt collection letter to my home address stating I owed Scottish Power £1200.  I replied asking for evidence, to which I received a photocopy of a bill for the house from July 2014 to November 2016.  The bill clearly showed energy charged for over 12 months when I did not live there.  I sent all the evidence I still had of my attempts to contact Scottish Power back to the debt agency, stating I do not owe what the bill says, however I will pay a bill that is calculated correctly for the time I lived there.  I heard nothing else.

Fast-forward to me checking my credit score in January 2020.  A credit default for £1200 was registered against me in December 2019.  I have a credit card with a zero balance, and a rolling 1 month £10 mobile contract, so there should be no issues with my credit.  I contacted Experian who passed me back to Clearscore saying I needed to go back through them.  This was in February and I was told to wait up to 4 weeks to be contacted by Experian.  4 weeks passed so I contacted Clearscore again, who told me my original request was never sent, and they can confirm it is now sent and they have confirmation.  Alongside this, I contacted Scottish Power to ask them to remove the default, and I am still awaiting a reply.  I have had 2 replies saying I will be contacted by the end of the week (This was late March) but nothing since.  I appreciate everything went COVID so Scottish Power are now only dealing with essential queries.  I am however still in a position to buy a house once lockdown etc is lifted.  (There is also now a notice of correction on my report.)

Since my credit score has a default against it (taking the score from 523 to 428) will I be shooting myself in the foot to even try to apply for a mortgage?   My reasoning being will a refusal of credit for a mortgage then stay on my file even after the default is removed, making it look even worse?

As much as I would like to wait for the score to be corrected and the default removed, I would very much like to buy my first house and get on with my life.  I doubt the score will be removed anytime soon for me to even start the process.

MalMonroe

"I have a credit card with a zero balance, and a rolling 1 month £10 mobile contract, so there should be no issues with my credit." Sadly, that doesn't prove that you are capable of making regular long-term repayments. The fact that your credit card has a zero balance is not actually a good thing because it doesn't demonstrate that you have the ability or income to maintain long term repayments. You need to be using your credit card and ensuring that you repay the spending sensibly. And that you're paying only £10 a month for a mobile contract will be discounted as it's so low. 

I'm not sure why Clearscore sent you back to Experian, Clearscore is operated by Equifax and they don't usually refer you to different agencies anyway. Your query is with the energy company here so it's difficult to know why you were told to wait for four weeks to hear from Experian. 
I can't believe that the previous meter number was never updated because meters are not replaced every time someone leaves a property and if there was no meter number at any time, that means that lots of people at that same address have been living there without paying any energy bills. Was it a smart meter? Gas or electric meter? Nothing's clear here. If you were there for a year without paying a bill and without the energy company knowing the meter number, how and why were they still supplying energy? It's all very confusing! In my years of home owning (many) I've never encountered such a muddled, mixed up tale. 
Yes, you will definitely be shooting yourself in the foot if you apply for any credit now. Even though lenders tend not to place great importance on your score, they do take notice of the number of credit applications you make. 

You definitely need to wait. Certainly until the lockdown eases. And then you need to speak to the energy company and get the matter sorted out once and for all. In the meantime you could try contacting Citizens Advice for their opinion, although I think they're pretty busy right now. Worth a try though. It's obvious that you do owe for the energy you used, you just need to sort out exactly what it is. Then pay it. Attempting to obtain a mortgage with this debt hanging over you would be just plain crazy.

Fighter1986

1. Your complaint is not with Clearscore, Equifax, or Experian. They are just reporting data given to them by Scottish Power
2. Your "Score" is meaningless. No lenders see this "Score". Lenders only view the raw data in your credit file (account history, search history, electoral role history, court data, etc). They use their own scorecards and customer profiling to decide if they want you.
3. You've raised a formal written complaint to Scottish Power? A formal written complaint should be broken down in to three sections:

> What the issue is
> What you've done so far to attempt resolution of the issue (including copies of any proof you have)
> What you expect in settlement to the complaint (e.g. for the erroneous default to be removed and that you be given an opportunity to pay the correct amount based on your actual time at the property and actual readings)

If Scottish Power don't resolve to your satisfaction within eight weeks escalate the matter to their ombudsman, 

https://www.ombudsman-services.org/sectors/energy

Good luck, you have a strong case  

obertray

@MalMonroe
Thankyou for your reply.  

Firstly I appear to have mixed up Equifax and Experian; it is Equifax that have been involved here not Experian. 

Secondly, there is a lot more bulk to the story regarding the (electricity) meter but because I was querying more about the impact on my score rather than what action to take with Scottish Power, I only explained it lightly.  For a little more context, the previous tenants before us used the house as a cannabis farm, so a top-up meter was installed about a month before we moved in because they had bypassed the meter.  The serial of this meter was never updated, so up until about December we were getting standing charge notices for the previous meter that had been uninstalled.  We were using the top-up meter as normal, however it was difficult as a house of 9 people with the top-up limit to keep it going long enough.  This was also paired with another neighbour issue which is in this post by a housemate at the time: https://forums.moneysavingexpert.com/discussion/5113884/energy-meters-on-neighbors-land  Eventually it was the Ombudsman that forced SP to update the meter serial, then come out and install a new usable meter.  This new meter was then never registered, which meant that when it came to moving out 3 months later, they could not create a bill as the property was still showing as having a top-up meter.  The evidence sent by the debt collection agency then shows that the next bill for this meter was generated in June 2016 (in my first post I said November, this was an error).  Not physical meter readings were taken (only estimated) from April 2015 when the newest meter was installed (when I lived there) to June 2016 (11 months after I sent them evidence of the readings and our move out date).


@Fighter1986
Thankyou also for your reply.  I have sent a complaint to SP pretty much in the same format you have outlined.  I have kept folders full of evidence, even though this was 2014, because I knew this would never be over.  This complaint was logged and acknowledged on 11th March this year, and I was told I would get a reply by the 22nd.  This never came, however I get that they were focusing on essential Covid customer queries only.  After I sent this post yesterday, I contacted SP for an update on my complaint.  They said they sent an email last week, however I haven't received anything.  They are apparently re-sending it again, as the case was "closed and actions had been taken".  I will update here with what actions those were when I actually see an email.

Fighter1986

Good luck, and there's no harm done in escalating this to the ombudsman now. Keep us posted