Unknown debts on your credit file

A reader asked an interesting question on my recent article about Experian or Equifax – which is best?:

I have recently signed up to Experian and Equifax. Experian’s is what I was expecting to see but Equifax’s has debts that I have no recollection of. I have taken this up with Equifax and all but two of the companies have responded by saying that the debt stands, please get in touch to discuss. Equifax say that they can’t remove anything from my report unless these companies give them permission to do so. How can I get these black marks removed from my file?

I am asking a lot of questions in this article so you know what to look out for. There are several possibilities about what could be happening here and it may take some digging from you to work out which is causing this problem.

Broadly the main possibilities are:

• the debt is yours, you have just forgotten about it;
• the debt is yours, but it has been sold to a debt collector so you don’t recognise the creditor name;
• the debt isn’t yours, it has been wrongly connected to you by either the creditor or the credit reference agency;
• the debt was taken out in your name but not by you – identity theft.

It’s not only your credit score that matters – if you don’t want hassle from debt collectors or even being taken to court, this needs to be sorted. 

Sold to a debt collector?

A common reason for seeing a creditor’s name you don’t recognise is that the original lender has sold your debt to a debt collector, usually because you have defaulted on it.

The debt collector should have sent you a letter, but perhaps it went to a previous address, or it hasn’t yet been sent.

If you can see a debt you know you owe and this shows as closed, with a balance of zero, this has probably been sold to a debt collector who is now reporting the debt. See Help! My debt has been sold to a debt collector for more about this.

Confused with another debtor?

You are less likely to have been confused with someone else if your name is Aristotle Pennyweather and you have lived in the same house for 30 years. If your name is Tom Walker and you have moved three times in the last five years it’s much more plausible. Here is a newspaper article about the problems a Joe Jones had.

So you should double check your credit records with all three credit reference agencies, so get your Experian, Equifax and TransUnion (used to be known as Call Credit) reports. See The best free ways to check your credit records for details.

Go through all the reports line by line. Is anything wrong? Apart from the unknown debts, is there any difference between them?

Do all of them have all your old addresses correctly? If there is an address there that you have never lived at, the credit reference agency may have wrongly linked that address to your name. Ask the credit reference agency to remove the incorrect address and the mystery debt may disappear with it.

Do those lenders only report to one credit reference agency?

Some lenders don’t report to all the credit reference agencies. There is a list here.

If the lenders of your mystery debts don’t report to Experian, then this explains the difference in the reports. It still doesn’t explain what the mystery debts are, but at least it’s clear why they are only showing on Equifax.

But if the mystery lenders do report to Experian, then the question is why Equifax is linking these debts to your credit record but Experian isn’t… I suggest you email Equifax and ask them this specific question.  And if you get to the point where you are complaining to the Information Commissioners Office about a creditor (see below) then you should also complain about Equifax.

Find out more about the debt with a Prove It! letter

To find out details about a debt you don’t recognise, you need to contact the creditors directly. There is no point in asking the credit reference agencies, they only report what they are told.

Write to the lender a Prove It! letter, saying that a debt has been reported by them to Equifax/Experian/Call Credit and you have no knowledge of it. I suggest you include more details about yourself – date of birth, your addresses for the last few years – you don’t have to do this, but it may help the creditor realise you are not their debtor. Give them a month to either provide you with details of the debt or to delete the report from your credit record.

If you still don’t recognise the debt from their reply, send them a formal email or letter of complaint. Put COMPLAINT in capital letters at the top of the letter or in the email title! Say that unless they delete the incorrect credit report you intend to complain to the Information Commissioner’s Office and the Financial Ombudsman

If that doesn’t resolve the problem, complain to the Information Commissioners office. And if that doesn’t work, go to the Financial Ombudsman. (If you are desperate to get the problem resolved – perhaps you want to apply for a mortgage soon – then you could complain to both at the same time. But that is extra hassle and shouldn’t be needed as the ICO should resolve your problem.)

Identity theft

If all the mystery debts appear to be fairly recent – in the last year or so – then it would be sensible to consider the possibility of identity theft.

You still need to contact the creditors and ask them to prove you owe the debts (see above), but also become a bit paranoid about identity. See Loans taken out in your name – how to tackle identity theft for details of one reader’s problem and my suggestions.

Identity theft is possible for older debts but it’s less likely as you would probably have found out about it. So if the mystery debts are old, then don’t assume it is identity theft, check out the other possibilities first.

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