Incorrect entry on Credit file prevented us gaining a preferred mortgage rate deal in June 2023!

Pointbreak1

Incorrect entry on Credit file prevented us gaining a preferred mortgage rate deal in June 2023!

As mortgage rates were becoming more volatile at the beginning of June 2023, we applied for a fixed mortgage deal, to move of our current Bank of England tracker deal.

We were totally surprised when were turned down as lenders stated I had a problem with my credit score, but no problem with affordability.

The Mortgage broker couldn’t understand why either we were turned down, particularly as we’d just been through the mortgage application process several months earlier as we only just moved in November 2022, so we were asked to check on “checkmyfile” to see if there was an issue.

It uncovered the previous owner to our new property had an unpaid energy balance of <£100.

This previous outstanding balance was mistakenly transferred to my name by the energy company trace and search department, and thus brought down my credit rating to such an extent that we were declined for our mortgage.

This error has now been corrected, and my credit rating is back where it should be on checkmyfile” and “Experian”, but too late for us to secure our preferred mortgage deal in the window before mortgage rates were raised further by the Bank of England on June 22nd, 2023.

Hence, we are now being offered mortgages, but now at far higher rates.

This massive error by the energy company has thus prevented us securing a new mortgage deal at a preferred rate of way below 5%.

We have approached the energy company complaints department for further comment several times and currently still awaiting to hear feedback, but we are now faced with a mortgage deal closer to 7% when we could have secured a far better deal.

This matter is therefore very annoying and frustrating as this will incur us considerable additional financial costs!

Other than take this matter up with the financial ombudsman which possibly might take years, any further advice on what we should do is most welcomed!

Many Thanks

MWT

Pointbreak1 said:

This previous outstanding balance was mistakenly transferred to my name by the energy company trace and search department, and thus brought down my credit rating to such an extent that we were declined for our mortgage.

This error has now been corrected, and my credit rating is back where it should be on checkmyfile” and “Experian”, but too late for us to secure our preferred mortgage deal in the window before mortgage rates were raised further by the Bank of England on June 22nd, 2023.

Just as a note to help phrasing if you do take this to a complaint, it is not the impact on your 'credit rating' that has caused you problems as none of the lenders know or care about the synthetic ratings used by the various agencies.

It is the events on your file that make a difference, and it is a little surprising that an outstanding balance of less than £100 would make a significant impact on the way you would be scored by the lenders.

What exactly did it show on your file for this balance?

It does seem that once the error was spotted, it has been promptly corrected, was any attempt made by your broker to tell the lender that it was an error?

It feels like it should only have been a few hours between getting a rejection and identifying the problem so it should have been possible to respond to the lender quickly with regard to the mistake...?

Pointbreak1

Thanks for the tips.

The events in the credit file report incorrectly stated;
1 adverse account reported (3 months late) credit score being 752/1000 (A low good) 
I then contacted "checkmyfile" and "Experian", unfortunately it took them about two weeks to correct, and this was at the beginning of the week before the June 22nd interest rate rises, meaning our window of opportunity on better rates was slowly diminishing during this period. 
My credit score is now back to "Excellent" after correction, and we are now receiving offers but at far higher rates than when we first applied in early June.
A flag was raised on my credit file a few days after this was error was finally discovered and that I was challenging this incorrect entry. 
Initially it was thought we were declined due to not being on the Electoral role.
I contacted the Energy company concerned for a letter to state I was not connected to this previous account, and guess what, this did not materialise despite reassurance they will provide this to me.
Several further attempts were made to reach out to the Energy company by phone and email. 
I do however have the following email from the Energy company back in March this year, as I was getting post addressed "To the homeowner" at my address. 
This I also provided mortgage broker, but they sought a letter from the Energy company on headed paper.  

“Once again I do apologize for any inconvenience caused due to this issue:

With this email I confirm that an account was opened under your name on the 25-11-2022 via our trace and search department and we have acknowledged that Energy company X has stopped supply at your property on the 24-11-2022 and you started your supply with Energy company Y as of the 25-11-2022.

I have requested for this account to be closed as you are not liable for the payments accumulated on this account and I have attached the council tax bill that you have sent to me with the request to ensure that this is resolved as soon as possible.

Once again we are truly apologetic for what has happened and the collections letters will be stopped from today going forward.”

MWT

I'm not sure how a complaint like this would be treated as it sounds like the incorrect information was removed faster than is usual once it was found, and I know this may not be helpful, but if you knew there had been confusion over this account back in March, why didn't you check your credit file then, and once again if applying for a new mortgage why didn't you check your credit file as soon as you knew you wanted to get a new mortgage?

I suspect a complaint will get you a token gesture, but I doubt it is going to deal with the consequences of a decision by a 3rd party not to lend, especially as it may have been a reaction to the combination of the late payment and not being on the electoral roll...

It would be interesting to hear if any of the brokers on here have handled a similar case in the past...?

Pointbreak1

Thanks again.

No reason to a suspect poor credit score, all this year the score was excellent.

Within my detailed credit file timeline, it highlights a dip in score directly coinciding with the time of our mortgage application processing by the lenders.

Up until the 13th June 2023 – credit file shows excellent score, then very shortly afterwards it dips dramatically by a couple of hundred points with the incorrect entry stating “This account's payment history has some payment issues that may affect your score - Up to 3 months late”

It took over a week to correct this on the file, thus us missing the best rates available.

First question to forum.

Do we have a case to go back to the mortgage lenders to re-evaluate our declined applications based on an incorrect credit report, even if the declines were at the first stage of application?

Second question to forum.

One lender earlier declined us just prior to 22nd June incorrectly, now the credit file is corrected we have been accepted by this lender but at an increased rate.

Do we have a case to challenge this lender to honour the earlier rate available first declined at, please?

Third question to forum.

Is the Energy company liable to pay costs due to us missing better rates due to their error to my credit file?

MWT

Pointbreak1 said:

Thanks again.

No reason to a suspect poor credit score, all this year the score was excellent.

Once again, ignore the credit score you see from these agencies, that is not he score your lender is using or referring to when they mention an issue with credit scoring.

It is the events on your file that matter, and given you were aware that the energy company were chasing a debt at your address back in March, it would have been prudent to check your file to make sure it was still clean before going after a new mortgage.

Re your questions, see what others think, but my take would be as follows:

#1 There is nothing to be gained by re-evaluating a previous declined application vs re-applying now, they are not going to give you access to an old product on that basis, which leads on to...

#2 No, there is no chance they will honour the old product rate. The declined, they don't have to tell you precisely why they declined so there is no 'incorrectly', it was declined then but they are now willing to move forward with you for whatever reason.

#3 I think this is unlikely, you are seeking damages for a consequential loss, which the energy supplier could not have reasonably foreseen, and the incorrect marker was promptly corrected once you raised it as a problem...

On that point, you said earlier:

Pointbreak1 said:

I then contacted "checkmyfile" and "Experian", unfortunately it took them about two weeks to correct...

So the error was corrected without you needing to get the energy company involved?

I'm wondering if the fault for the marker remaining was on the credit agency side not the energy company at all?

simon_or

Bank who declined a mortgage - I don't think they have anything to answer for as they merely went by the duff info on the credit report which was reported by the Energy company

Energy company - it looks like their trace and search actively opened an account in your name on the address, incorrectly, applied the outstanding amount and then started reporting non existent arrears to the credit bureaus. So they definitely appear to be at fault.

If you can collate info from the broker or bank confirming that it was a bank credit score fail, and match it up with the dip in your credit when the arrears were put on and the rise when they were taken off, I think you have enough for a complaint against the energy company.

If the energy company rejects compensation, this wouldn't go to the financial ombudsman, it would go to the energy ombudsman.

I don't know if you'll get anything out of it but there's no cost and very little effort involved in making the complaint, escalating it and seeing it through.

I had Eon put an Arrangement To Pay marker on my credit report with no issues at all. Thankfully I spotted it, saw that other MSE forum people had the same issue and had to raise a complaint to get it corrected. Like you, if I had to apply for credit during those few weeks, that would have affected me as well.
https://forums.moneysavingexpert.com/discussion/6448446/eon-suddenly-reporting-to-equifax/p1

PixelPound

Definitely unfair, but they will say that it was corrected as soon as it was brought to their attention.

What is strange is if you are yet to buy the property, how was the bill attached to you as clearly you didn't own it at the time.

MWT

nic_c said:

What is strange is if you are yet to buy the property, how was the bill attached to you as clearly you didn't own it at the time.

I believe this is a remortgage of a relatively recent purchase, not a new purchase.

housebuyer143

You don't really have any compensation or claim to the cheaper rates from the mortgage companies. They did what they do when they see adverse on your file and declined you, it's not their fault that this was incorrect. 

Pointbreak1

Thanks all for the advice and comments,

Yes, this was a remortgage for our property we purchased in November 22, we were wanting to change it to a fixed from a variable tracker in June this year.

simon_or  said;

“Energy company - it looks like their trace and search actively opened an account in your name on the address, incorrectly, applied the outstanding amount and then started reporting non existent arrears to the credit bureaus. So they definitely appear to be at fault.”

Correct, it’s apparent there was a tipping point when this incorrect entry hit my credit file, and that coincided right at the time when we were applying for our remortgage.

The timeline on my credit file scoring changed and the negative entry suddenly appeared for over a week with the wording “This account's payment history has some payment issues that may affect your score - Up to 3 months late”.

Despite it being corrected by “checkmyfile” and “Experian”, and contacting the Energy company, this exercise took well over a week, and by that time, it was too late, the damage was already done.

Back in March, the Energy company confirmed to me they had corrected their error, but obviously not. All this year my score was excellent, until this wrong entry suddenly appeared by the Energy company in June.

As suggested, I have all the information and exact timeline on events.

I’m waiting on the Energy companies’ response before now going to the Ombudsman to name and shame.

I believe mortgage lenders should still honour an earlier rate which we have missed out on, particularly if that lender is willing to provide a mortgage to us now, once error corrected.

Thanks again!