Case study

The last thing you need when you’re applying for a mortgage is to hear your name is on a list of bad debtors – for a debt you never had. But that’s what happened to Tim Hunt (not his real name) last August.

Tim had been a careful borrower for more than a decade. He and his wife had paid off mortgages on two houses and never got into strife with their credit cards. However, last year they applied for a mortgage from ASB. A few days later Tim received a letter from GE Money saying he was in default on a GE Money personal loan of nearly $7000 and this information had been given to credit-reporting agency Dun and Bradstreet.

An urgent phone call to GE Money, as well as a complaint to ASB, saw the issue resolved. But Tim doesn’t believe he was given a full explanation. He believes GE Money had lost track of a defaulting customer who shared his name. GE then got access to his contact details from the credit check ASB did after Tim and his wife applied for their mortgage.

Tim later received a letter of apology from another company, Veda Advantage. Veda Advantage had given GE Money Tim's address.

Tim eventually received approval for his mortgage. But he was left wondering what other incorrect information was held about him – and whether a similar problem could happen again. He took our advice and requested a copy of the information held about him from both Veda Advantage, and Dun and Bradstreet.

What was in Tim’s file?

Tim requested his credit files from Veda Advantage, and Dun and Bradstreet using the 24-hour-turnaround service (see Accessing your file). He used couriers rather than faxing each application, which slowed the process. He received the files five days later.

Dun and Bradstreet's letter stated they did not have a credit file on Tim (so no record of unpaid loans there). Veda Advantage said its file had been created more than 15 years ago and included no defaults or other adverse information. Tim's "VedaScore" was nearly 900 out of a possible 1000 (the higher the number the better). Since neither file had any record of the GE Money mix-up, Tim was reasonably reassured. However, he will be checking regularly.

The data-recording process clearly isn’t foolproof. Veda Advantage told Tim the data it collected was recorded through “sophisticated matching regimes”. However the company went on to say that in his case a mistake was made when a “particular bulk run” was entered manually.