If the information in your credit report is misleading in some way, or misrepresents you, and the credit reference agency isn’t able to remove or amend it, you’re entitled to use a Notice of Correction (NOC) to explain your situation.
Adding a Notice of Correction is useful if you’ve experienced an adverse event that’s affected your financial stability - ill health or job loss, for example, and you can let lenders know that your situation isn’t simply due to poor money management.
The correction notice can be up to 200 words in length, but it mustn’t be inaccurate, libellous, or defamatory to a third party. So how do you add a Notice of Correction to your credit file?
There are three main credit reference agencies in the UK – Experian, Equifax, and TransUnion, which was previously Callcredit. Each agency will have its own form to request a Notice of Correction, and you may be able to download these from the websites.
Alternatively, you could contact each agency by phone or email to let them know you want to add a notice to your credit file. Bear in mind, however, that each of the credit reference agencies typically holds different information about you, and if all three credit reports are misleading you might need to lodge a correction notice with all of them.
An NOC is limited to 200 words, and your explanation needs to be clear but concise. The notice musn’t be defamatory to any third party, or libellous, and must be totally truthful to be accepted onto your credit file.
Essentially, you’re describing the extenuating circumstances you want lenders and other organisations to take into account when reading your credit file. In the case of lenders, the aim is to positively influence their decision.
An NOC is more effective when it’s only used once within a credit report, or used to explain a situation over a specific timescale – if you suffered a bout of serious ill-health, for instance, or were made redundant when your employer went out of business. One of the main points to remember is that placing multiple Notices of Correction throughout your credit file tends to dilute their impact and effectiveness.
If Notices of Correction appear on your credit file, lenders must read them before making a lending decision. Crucially, those that have looked at your credit report during the six months prior to the NOC being added must also be informed of their existence.
It’s worthwhile knowing that any borrowing application made after the Notice of Correction has been added will need to be reviewed manually by the lender. This can delay your applications, as it’s not possible to provide an automatic decision when a Notice of Correction is present.
If you would like more information on Notices of Correction, our experts at Scotland Debt Solutions can help. We specialise in helping Scottish residents deal with debt, and can offer free same-day meetings in our offices around Scotland.
The breathing space debt moratorium in Scotland enables people in debt to trigger a six-month period that’s free of creditor action, so they can take stock of their situation and formulate a plan.
The Debt Arrangement Scheme in Scotland, or DAS, enables people in serious debt to repay their creditors in full over a longer period of time.
Our Scottish based team can help advise you on your debt problems.