SLC sharing with credit reference agencies?

vickyp_2

Hello,

I wondered if anyone knew anything about the plans for the student loans company to share information with the credit reference agencies this year?

I receieved a default notice from them yesterday, for my student loan from 1995, despite having made payments . These payments were made to a debt collection agency, but unfortuantely they weren't collecting enough from me to cover my arrears, but didn't tell me this.

I have found an article here, but nothing more specific. http://www.independent.co.uk/money/loans-credit/borrowers-set-to-struggle-as-the-banks-raise-the-bar-768421.html

I am worried about the impact this will have on my credit record.

Any info would be great.

Vicky

CLAPTON

as unsatified default will trash your credit record for 6 years.. you will find it difficult or impossible to get credit although you will probably be able to get a mortgage but at a higher interest rate.

vickyp_2

Thanks for the reply.

I was aware that a default might knacker my credit record.

Previously, the Student Loans Company didn't share information with the credit reference agency, and I have heard that they might start doing this, so it was infomation on that, rather than information on defaults I was after.

Anyone know anything about this?

financial_warrior

The SLC shouldn't be allowed to share information with the credit reference agencies whilst their adminstrative performance is so poor. It also isn't right that failures by third-parties, such as your employer and HMRC, can cause you to end-up with defaults, even though the money has been coming out of your salary each month.

Join the campaign to stop this happening until the Government brings the SLC under the regulation of the FSA and FOS.

Facebook: http://www.facebook.com/group.php?gid=37098460872

Downing Street Petition: http://petitions.number10.gov.uk/studentdefaults/

mummytofour

I laugh! Well IMHO as somebody with a totally ummm dead in the water credit file. You are borrowing money so why should it not be recorded on your credit file???

financial_warrior

I laugh! Well IMHO as somebody with a totally ummm dead in the water credit file. You are borrowing money so why should it not be recorded on your credit file???

Because when the Government introduced student loans, they told everyone that they would have no bearing on the ability to obtain credit in future. Or, as you might better understand, we've worked very hard, haven't borrowed to buy a plasma telly that's too big for our lounge, and don't want to end up like you...

melancholly

i'm still hoping someone will provide a link to give more info on the government plans to do this.... i think it's shifting the goal posts and would be happy to object, but not until the people organising the petition can provide some independent accounts of what the changes will involve.

(after the embarassing petition about student loan interest that was based on incorrect facts, it makes sense to be more cautious about fact-checking!)

Masomnia

The Times Online article that Facebook group posted is almost 3 years out of date...

I shan't be signing.

financial_warrior

The article underneath The Times one is from this January!! Although I'm not a student anymore, it has been receiving a lot of coverage inside Universities.

Here's another more recent article:

Jan: http://www.independent.co.uk/money/loans-credit/student-loan-defaults-to-be-included-in-credit-records-768401.html

Feb: http://www.telegraph.co.uk/money/main.jhtml?xml=/money/main.jhtml?view=DETAILS&grid=&xml=/money/2008/02/26/cmstud26.xml

Feb: http://www.epigram.org.uk/view.php?id=2320

March: http://www.national-student.co.uk/PDF/march_2008/page_2.pdf

This graduate article on Monster discusses it: http://graduate.monster.co.uk/8663_en-GB_p1.asp
as does it here: http://www.loanguru.net/Credit-History/Credit-History.php

This article argues from a credit affordability perspective, which is sensible in a way, but doesn't fairly address the point that graduates never signed-up to information about their student loans being shared with high-street lenders: http://www.creditcards.co.uk/news/2006/May/over-stretched-credit-cards-for-graduates-with-student-loans.html

I think it's a bit hard to refute publication in both The Independent and The Telegraph this year.

melancholly

thanks for the articles. i guess the only thing i don't understand, is that if student loan deductions are automatically taken from pay cheques, then how can there be missed payments (aside from if you change jobs)? if the money just goes every month, then most students would show a good record for paying back the loan? or am i missing something?

financial_warrior

The Facebook group adequately explains:

Because you're tacitly believing the money going out of your salary each month is reaching the SLC... It doesn't.

There are countless people, many I know, who have:

(a) Being making repayments through their salary, but years later find that HMRC hasn't sent these payments onto the SLC.

(b) The SLC have 'lost' payments, and setup duplicate accounts that are running credit balances whilst another account is running a debit (and defaulted) balance.

(c) (i) Not all employers start deductions when they're supposed to. This happens a lot, and it's not always in the control of the employee to sort this out, particularly if the payroll is outsourced.
(ii) Employers go out of business before deductions are sent, or they simply never send them... Criminal, but it still happens (have a search on this forum).

(d) Self-employed and people working overseas have problems managing their accounts when the SLC is so bad a communicating and supplying records.

Whether or not the mistake was your fault, like all other credit agreement defaults, the default WILL be recorded. It's hard to clean-up a credit report, many people on these forums would testify to that!

Given the recent interest rate increases, and the desire to communicate information to the credit reference agencies, it's high time the SLC came under the regulatory control of the FSA. Surely no-one would disagree with that?

My MP (Jeremy Corbyn) supports my concern and is actively lobbying the Government on this issue. You clearly think I'm mad, and chasing a non-issue; but I'm not apathetic, and there are plenty more out there like me.