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What’s at the heart of a credit score that can ruin a life

Anna Tims
Photograph: Andriy Popov/Alamy

In 2016, a default was registered on my credit file by my bank after I missed three payments of my student overdraft. During this time, I was in an abusive and controlling relationship. I had no money of my own. Shortly before my son was born in the same month, the default was registered.

I was forced to move hundreds of miles away to a new city. I wasn’t able to divert post. My only source of income was statutory maternity pay, which was given straight to my partner. When I left him and began to rebuild my life, I was made aware of the default and immediately repaid it at £60 a month.

The debt was settled in August 2019. I now want to buy a home, but I am unable to get a mortgage because of the default, even though I have had no further issues with credit. This is keeping my son and me stuck in rented accommodation that we can ill afford, and is a painful reminder of what we have been through. I would like to explore whether the default could be removed from my file before the six years is up so we can move forward.

GH, London

This is a heart-rending story which exposes the shortcomings of the credit reporting system. The ability of potential lenders to scrutinise the reliability of applicants is what allows us to borrow, but the process is a blunt instrument that can see a single oversight ruin finances for six years after a default is settled.

I’ve heard from people unable to buy a home or take out a mobile phone because of £10 or less they didn’t know they owed. Credit reports show the default without the circumstances, which in cases such as yours are crucial, and you can’t usually remove it unless you can prove an error.

But you do have options. First, talk to your bank. In 2018 the Financial Abuse Code of Practice was introduced to help victims of coercive partners regain control of their money. It requires banks to train staff to recognise and help those in your situation, and 18 banks have so far signed up. Your bank may be willing to remove the default if you explain the background.

If that fails, you can add what’s known as a “notice of correction” to your credit report with all three main credit reference agencies. This allows you to detail extenuating circumstances in up to 200 words.

Experian reckons that someone with a solitary three-year-old default notice that has been paid off should be able to secure a mortgage with the help of a broker, although you may miss out on the cheapest deals. It’s also worth consulting a free debt advice service such as StepChange. It says: “If your situation makes it difficult to make a phone call, some services, such as ourselves, offer advice over the internet, which can be more discreet.”

If you need help email Anna Tims at your.problems@observer.co.uk or write to Your Problems, The Observer, Kings Place, 90 York Way, London N1 9GU. Include an address and phone number. Submission and publication are subject to our terms and conditions