We recently had two clients tell us that they were declined for home loans after a lender viewed the access section of their credit file. But how was this possible?
The access section is right down the bottom of a credit file and usually has a long list of credit providers who have recently accessed the file.
The first client said that they were declined a home loan because the access section showed debt collection agencies looking into his file.
The second was also declined a home loan because the client had a broker he worked with in 2016 that was blacklisted, and ANZ audited all his clients. Subsequently, the client had a file access notation saying, “ANZ fraud external investigation.” The lender declined his application because of it.
We knew the access section of a credit file could only be seen by a consumer, not by a credit provider. So, we asked Equifax to confirm this was still the case, and if the above accesses could be erased as they were leading to failed loan applications.
Equifax said: “Credit providers are not able to see file access. It is just physically not a section that we return on a credit file to a credit provider. Legally, we cannot erase file access as they are an audit trail of companies who have accessed the individual’s information.
“Your customer may have been declined for another reason. The credit providers rarely specify exactly why that is, and generally just say that it was in part due to information received from Equifax.
“I think your customer may be making an assumption that the file access is the reason, but this cannot be the case.”
Equifax may be right in saying there were other reasons for the rejection.
However, looking a bit deeper into these two cases, it was the client and broker who had emailed the client’s own credit file to the lender, thus revealing the file access section to the lenders, and raising the red flag.
Our advice: Don’t send a consumer’s credit file to a lender, nor suggest a client email their credit file to the lender themselves. Let the lender acquire a copy of the client’s credit file as this will not show the access section, and lead to these unexpected and unfair rejections.
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Dr Merrilyn Mansfield has been a consumer advocate at Princeville Credit Advocates since 2008. At Princeville, she heads the advocacy team, and works on complex cases for consumers and companies who have negative, and potentially incorrect, information on their credit files. Dr Merrilyn is in her final year of Law.
To contact Merrilyn please call 1300 93 63 63 or 0425 322 972.
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