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Credit report myths debunked

The idea of a credit blacklist on which a credit reference agency lists people it deems should not be given credit, is a myth.

Instead, lenders make up their own minds when looking at information on a credit report, and some will refuse credit when others are happy to provide it.

This is just one of a number of myths about credit reports that credit agency Experian is hoping to debunk through a new report.

Another is that the previous occupants of your home can affect your creditworthiness. The reality is that lenders can only carry out credit checks on people, not addresses – so information about a previous occupant will have no bearing on your creditworthiness.

The idea that adverse information can be removed from a credit report for a fee is also a myth. Experian warns people to be wary of any company that says it can repair creditworthiness, because the only information that can be removed or altered is that which is incorrect – and credit reference agencies will do this free of charge.

Experian has published Credit Report Myths to set the record straight over some of the most commonly held misconceptions behind credit ratings.

"There are a number of myths about the credit reference processes that have been perpetuated over the years, leaving many consumers baffled," said Jill Stevens, director of consumer affairs at Experian.

"Many of these myths have no basis in fact. It is important that everyone understands how credit works so they can have confidence that the system really does work for them."

Contrary to popular belief, credit refusals do not show up on your record, because credit reference agencies are not told which applications are successful or not. All that is logged is that a lender has viewed your information.

There is also a popular misconception that negative information about you, affects the rest of your household. But lenders are only able to view information about you if you have joint finances – a loan, bank account or mortgage – with the person who is applying for credit, or vice versa. XXX