Credit File arrears

Upropr

Hi

Have a credit file question hopefully someone can help with.

We are in the process of switching mortgage providers and unfortunately the lender has said there is an issue with our credit file. This came as a shock as we thought our credit files were fine. We have signed up with checkmyfile to access 3 main providers and found that we have a utility bill that is 5 months in arrears. At first we were confused as we pay our utilities by direct debit and are always about £500 in credit. Looking through our credit files, there are about £5k of monthly Direct Debits all paid on time and no other discrepancies over the past 6 years.

After doing some research it appears the utility debt is for my old house we let. Whilst decorating earlier in the year during a tenant change, we were responsible for the bills. The utility company required us to top up using their app. However, over the 4 weeks the app was frequently either offline or just not working. Frustratingly we had to top up by calling the provider. When the new tenant moved in, the account was finalised through the agent by meter readings provided by the clerk. At this point we had no worries as we had been overpaying according to the meter readings but the app still wasn’t working. After just one month of opening, the utility company closed our account and posted a cheque to our correspondence address for the refund.

Fast forward 5 months and according to the utility company, the refund was for electric but we owed £2 in gas. Unbeknown to us, although the same utility company provides both gas and electric, they are treated as separate accounts and our £2 gas debt was not deducted from the refund. Although we also overpaid Gas as well as electric, by the time standing charges and VAT was added, the Gas was £2 in debt. The utility company say they sent us an email 5 months ago letting us know we owed £2, but it must have gone to junk as we did not receive it. They also did not write to us by post or try and contact us by phone.

1.      Can utility companies send an email and then if payment isn’t received, mark the credit file as arrears?

2.      Is there not a minimum amount before marking the credit file. Seems quite harsh to wreck someone’s credit file for £2.

3.      Is there anything we can do to get this debt removed from Experian, Equifax and Transunion (or anywhere else)?

4.      Should we be paying the £2 now or wait? We have no qualms with paying the £2 but not sure if it’s better to dispute or just pay?

The utility provider has said they will look into it but hinted that we should take responsibility for keeping up with our own payments. In an ideal world we would check our junk more furrily. But maybe we were unlucky with the fact we weren’t used to topping up a meter, the Gas/Electric being treated separately for billing purposes (which we're not used to) and the app not allowing us to access the bill. I do feel it’s a bit unfair for the utility provider to send 1 email then report the £2 debt as arrears with no other attempts at contact, particularly after they sent us a refund for the other fuel. Just be good to get an idea of where we stand.

Thanks for any help you can offer as this will cost us thousands in extra interest if we have to use a different lender.

MattMattMattUK

Upropr said:

Hi

Have a credit file question hopefully someone can help with.

We are in the process of switching mortgage providers and unfortunately the lender has said there is an issue with our credit file. This came as a shock as we thought our credit files were fine. We have signed up with checkmyfile to access 3 main providers and found that we have a utility bill that is 5 months in arrears. At first we were confused as we pay our utilities by direct debit and are always about £500 in credit. Looking through our credit files, there are about £5k of monthly Direct Debits all paid on time and no other discrepancies over the past 6 years.

After doing some research it appears the utility debt is for my old house we let. Whilst decorating earlier in the year during a tenant change, we were responsible for the bills. The utility company required us to top up using their app. However, over the 4 weeks the app was frequently either offline or just not working. Frustratingly we had to top up by calling the provider. When the new tenant moved in, the account was finalised through the agent by meter readings provided by the clerk. At this point we had no worries as we had been overpaying according to the meter readings but the app still wasn’t working. After just one month of opening, the utility company closed our account and posted a cheque to our correspondence address for the refund.

Fast forward 5 months and according to the utility company, the refund was for electric but we owed £2 in gas. Unbeknown to us, although the same utility company provides both gas and electric, they are treated as separate accounts and our £2 gas debt was not deducted from the refund. Although we also overpaid Gas as well as electric, by the time standing charges and VAT was added, the Gas was £2 in debt. The utility company say they sent us an email 5 months ago letting us know we owed £2, but it must have gone to junk as we did not receive it. They also did not write to us by post or try and contact us by phone.

1.      Can utility companies send an email and then if payment isn’t received, mark the credit file as arrears?

Yes, because it is a factual position.

Upropr said:

2.      Is there not a minimum amount before marking the credit file. Seems quite harsh to wreck someone’s credit file for £2.

There is no minimum. 

Upropr said:

3.      Is there anything we can do to get this debt removed from Experian, Equifax and Transunion (or anywhere else)?

You can get it changed to up to date/satisfied paying it. You cannot get it removed as it is a factual statement.

Upropr said:

4.      Should we be paying the £2 now or wait? We have no qualms with paying the £2 but not sure if it’s better to dispute or just pay?

Pay it.

Upropr said:

The utility provider has said they will look into it but hinted that we should take responsibility for keeping up with our own payments. In an ideal world we would check our junk more furrily. But maybe we were unlucky with the fact we weren’t used to topping up a meter, the Gas/Electric being treated separately for billing purposes (which we're not used to) and the app not allowing us to access the bill. I do feel it’s a bit unfair for the utility provider to send 1 email then report the £2 debt as arrears with no other attempts at contact, particularly after they sent us a refund for the other fuel. Just be good to get an idea of where we stand.

Thanks for any help you can offer as this will cost us thousands in extra interest if we have to use a different lender.

Pay it so it stays as satisfied. Why would it cost more? Virtually every lender is offering near identical rates at the moment. What does your broker say? Normally they can negotiate minor issues like these once satisfied and they can give you guidance on how long to wait. 

Upropr

MattMattMattUK said:

Upropr said:

Hi

Have a credit file question hopefully someone can help with.

We are in the process of switching mortgage providers and unfortunately the lender has said there is an issue with our credit file. This came as a shock as we thought our credit files were fine. We have signed up with checkmyfile to access 3 main providers and found that we have a utility bill that is 5 months in arrears. At first we were confused as we pay our utilities by direct debit and are always about £500 in credit. Looking through our credit files, there are about £5k of monthly Direct Debits all paid on time and no other discrepancies over the past 6 years.

After doing some research it appears the utility debt is for my old house we let. Whilst decorating earlier in the year during a tenant change, we were responsible for the bills. The utility company required us to top up using their app. However, over the 4 weeks the app was frequently either offline or just not working. Frustratingly we had to top up by calling the provider. When the new tenant moved in, the account was finalised through the agent by meter readings provided by the clerk. At this point we had no worries as we had been overpaying according to the meter readings but the app still wasn’t working. After just one month of opening, the utility company closed our account and posted a cheque to our correspondence address for the refund.

Fast forward 5 months and according to the utility company, the refund was for electric but we owed £2 in gas. Unbeknown to us, although the same utility company provides both gas and electric, they are treated as separate accounts and our £2 gas debt was not deducted from the refund. Although we also overpaid Gas as well as electric, by the time standing charges and VAT was added, the Gas was £2 in debt. The utility company say they sent us an email 5 months ago letting us know we owed £2, but it must have gone to junk as we did not receive it. They also did not write to us by post or try and contact us by phone.

1.      Can utility companies send an email and then if payment isn’t received, mark the credit file as arrears?

Yes, because it is a factual position.

Upropr said:

2.      Is there not a minimum amount before marking the credit file. Seems quite harsh to wreck someone’s credit file for £2.

There is no minimum. 

Upropr said:

3.      Is there anything we can do to get this debt removed from Experian, Equifax and Transunion (or anywhere else)?

You can get it changed to up to date/satisfied paying it. You cannot get it removed as it is a factual statement.

Upropr said:

4.      Should we be paying the £2 now or wait? We have no qualms with paying the £2 but not sure if it’s better to dispute or just pay?

Pay it.

Upropr said:

The utility provider has said they will look into it but hinted that we should take responsibility for keeping up with our own payments. In an ideal world we would check our junk more furrily. But maybe we were unlucky with the fact we weren’t used to topping up a meter, the Gas/Electric being treated separately for billing purposes (which we're not used to) and the app not allowing us to access the bill. I do feel it’s a bit unfair for the utility provider to send 1 email then report the £2 debt as arrears with no other attempts at contact, particularly after they sent us a refund for the other fuel. Just be good to get an idea of where we stand.

Thanks for any help you can offer as this will cost us thousands in extra interest if we have to use a different lender.

Pay it so it stays as satisfied. Why would it cost more? Virtually every lender is offering near identical rates at the moment. What does your broker say? Normally they can negotiate minor issues like these once satisfied and they can give you guidance on how long to wait. 

Thanks for the reply

So just 1 email is all that needs to be sent and the credit file can be marked as arrears every month?

Is that indefinitely? With no second correspondence needed to be sent?

Are they not required to send a bill or demand via post?

They said the bill was available on the app which wasn't working and the account is now closed. Are you saying the fact we didn't have access to the bill is irrelevant?

With regards to our mortgage this is very serious. We cannot lock in a rate until this is fixed and rates are now rising. There is no guarantee the lender will lend to us as we have 5 months of arrears of £2. It is at the lenders discretion as to whether to lend or not and they are looking for it to be removed as it doesn't sound like they are happy to lend with "satisfied/up to date". There are very few lenders which do JBSP mortgages. Lenders which do guarantor such as Nationwide are no longer lending to new customers on this type of mortgage. We also have about 8 different income streams and some are not counted for affordability by other lenders. The next cheapest lender is about 0.4% more expensive which is about £140 a month more. That's a lot of money over the next 6 years.