Proposed reform of Credit Reference Agencies
Credit Reference Agencies (CRA) are a reality of modern day life.
In an ideal world these agencies should act to protect both the consumer and companies that use them alike. They should act for a means for the companies that give credit to analyse the borrowing of a consumer and for the consumer to benefit from reasonable lending from those companies that takes into account the history of the borrow and the amount that has already been borrowed.
The reality though is different to this, they are used are as means of punishment by lenders and reflect the habits of customers going back over 6 years which in the majority of circumstances does not reflect the customers present situation.
Once over the records on that the Agenises kept only where only available to lenders, but more and more these records are being used by prospective employers and used in the employment selection, and by rental companies when making the decision to rent a home to families.
What this in fact does is that a young man at university who used a student credit card that defaulted, up to 6 years after that default was issued has no access to competitive mortgages and also has a large section of the rental market withheld to him. Yet this could does not reflect his present circumstances, where he may well be married with children and earning a decent wage.
I personally believe that the goal posts in this county on home-ownership and employment have been moved without the public or government noticing.
The only way to control the Credit Reference Agencies is though an Act of Parliament that controls whom can access this information, what information can be collocated, the time scales of this information remains searchable, and a removal process that is in itself has finality and is fair to both the consumers and companies that use the registers for it can no longer be used as a way of punishment by companies but reflects up to date information in a balanced and fair manner.
I have outlined what I believe to be a balanced use of such systems that should work for all involved.
1. Defaults are presently keep on record for 6 years regardless is paid in full or not.
a. I purpose that defaults should remain on a person’s file for a period of 12 months after payment in full and after the 18 months all records of the account should be removed and under no circumstances should be present after a period of 6 years after.
2. Account history are presently record over a period of 6 years, the last 6 years history is recorded regardless of the fact the account is still open or not.
a. I purpose that account history should remain the same for active accounts (being the last 6 years history is reported) and for closed accounts that the history of the last 6 years remains in place for 18 months at which point all records of the account should be removed.
3. CCJs are presently recorded for a period of 6 years and are marked unpaid or paid from the date of the judgement, if a judgement is paid within 30 days it is not recorded on the public register.
a. I purpose that CCJs should remain the same for unpaid judgements/judgements paid within 30 days of the judgement and for judgements paid after 30 days that the judgement remains in place for 18 months at which point all records of the account should be removed.
Added 15:30 22/02/07
Who can search the registers?
To confirm address and/or identity verification,
Anyone who is a data controller and where the person has given permission.
These should be Unrecorded Enquiries that are shown for you on your copy of your report but are not seen by anyone else. Also they should have no access to any payment history, but simply have their enquiry confirmed or unconfirmed.
Account history.
Simply that account history can only be searched by companies with a consumer credit licence and where the company would not need a consumer credit licence due to the nature of the loan or credit it will be still a essential to hold a consumer credit licence to search the registers, and this can only be searched where the person has made an application for credit or to stand as guarantor. Under no circumstances can a prospective or present employer (or in fact a former) search the account history register.
Applying for or holding credit will be critical to searching the register, (as home rentals on the hole to not give credit they will only be able to search “address and/or identity verification”).
Automatic searching or the register by lenders will be forbidden once credit is extended, and can only be searched again with the express permission of the person, this permission cannot be wavered, by contract or advance permission and any permission gained will only apply for 21 days and for one search only of each of the resisters.
Comments please
Proposed reform of Credit Reference Agencies 
