Do you have an issue you need put right? Which? is here to help get your consumer problems sorted.
Dear Which?,
I recently made an offer on my dream house only for my mortgage application to be unexpectedly refused due to marks on my credit file. This was a huge surprise as I've always had an excellent credit rating.
The marks turned out to be from an issue I'd had with Klarna, a 'buy now pay later' (BNPL) provider, several years earlier when I bought a TV using Klarna's financing option. While I thought I'd set up direct debits as instructed by Klarna, I later found out the payments hadn't been taken properly. I spoke to Klarna at the time and it reassured me that the issue was resolved.
When the mortgage was refused, I contacted Klarna again asking it to remove the errors from the report, but it told me it could take two months for the issue to be resolved. Klarna eventually agreed to remove one of the marks, acknowledging that its process for setting up the direct debit at the time was misleading, but the remaining two marks are still on my credit report.
We can’t get a mortgage in principle to secure the property. We have now taken ours off the market, and I'm concerned we might lose our house sale completely. Are you able to help get the marks removed?
Adam
Put to rights
Hannah Downes, consumer rights expert at Which?, says:
Discovering an erroneous mark on your credit file mid-mortgage-application is far from ideal. Even a small error on your credit file can have huge consequences – and missed payments in particular are one of the most prominent red flags to other lenders.
You can report errors on your credit file directly to the lender and credit reference agency. It's up to the lender (in this case, Klarna) to remove the error from your file. If it refuses to do so, you can add a notice of correction to your file to explain why the error is there.
With something as time sensitive as securing a mortgage, it's understandable that you want Klarna to correct the mistake quickly.
We spoke to Klarna on your behalf and it told us it updated its instructions for its financing product last year, making it easier to set up direct debits. It apologised for your experience, which happened before these changes were made, and has now removed the credit marks from your file.
With your credit score back on track, you were thankfully able to secure your mortgage in time.
Need to know
- Report any errors on your credit file to the credit reference agency, which will add a 'notice of dispute' to the entry so other lenders know it could be inaccurate.
- The credit reference agency will contact the lender on your behalf and must get back to you with findings within a month.
- There's no guarantee an error will be removed unless the lender grants the CRA permission – if it doesn't and your records aren't updated, your next option is to add a 'notice of correction' to your file, allowing you to explain why the error is there.
Get in touch. If you've got a consumer rights problem you need put right email us at yourstory@which.co.uk
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source https://www.which.co.uk/news/article/klarna-nearly-derailed-my-mortgage-application-a8hRC9Z2PY6N