A tiny error in your address could wreck your credit rating

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Gary Sleet* no longer officially exists as far as the financial sector is concerned. He’s ineligible for a mortgage, a personal loan or a mobile phone contract, and he would be refused if he applied for a credit card.

Sleet, who lives in Paisley, Renfrewshire, has committed no offence and has never missed a payment. His credit rating was wrecked, he says, because his local council changed his flat number on the electoral roll. This means his address does not match details on Royal Mail’s postcode address finder (PAF), which is used by most companies to verify customers.

“When agencies and lenders and banks try to find me, they use the postal address database,” he says. “Renfrewshire council has, in effect, negated my existence by refusing to update this record.”

UK addresses are recorded on three official databases – the local authority street naming and numbering register, the electoral roll and the PAF, compiled by Royal Mail.

If there’s a discrepancy between them, a resident’s full credit history may not show up when lenders perform a credit check and their credit score will plummet.

That’s because all companies and organisations purchase their databases from Royal Mail. If an address doesn’t show on the PAF, it’s deemed not to exist by traders.

According to Royal Mail, discrepancies happen because, while it is obliged to list addresses in the format registered by local authority street naming and numbering departments, electoral roll entries can be amended for a fee at the request of homeowners.

Tiny anomalies could potentially make a life-changing difference. Householders who substitute “apartment” for “flat”, or a house name for a house number, may find themselves in a similar position to a serial debtor as far as lenders and retailers are concerned. And residents in buildings that have been converted into flats, or student halls of residence, face finding themselves in financial limbo as the flat numbers may not be individually listed on the PAF.

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It’s an issue that particularly affects residents in Scotland because of arcane numbering systems in older buildings. Historically, flats in tenements were registered according to the street number of the building, which storey they were on, and how far they were from the top of each staircase. When Royal Mail computerised its database, it counted the number of flats in a block, and allocated consecutive numbers.

Sleet, a university researcher, discovered the problem when he applied for a loan to consolidate student debt, and his application was refused due to a poor credit rating.

When he checked, he found that his flat number appeared on the electoral roll as ½/75, instead of 75/2 listed by the PAF. “When I asked the council to rectify my data, so it links together on credit reports, it said I have to get permission from all the owners in the building, even though two of the four flats are empty and we are the owner-occupiers,” he says.

Renfrewshire council denied it had recently amended Sleet’s address, and insisted all tenants in the building must agree on an address format which it, and Royal Mail, will adopt.

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It says: “We have offered to assist Mr Sleet with contacting the other owner/occupiers and will continue to liaise with him to ensure this is resolved as soon as possible.”

The Information Commissioners Office, which upholds information rights, told the Observer it was unaware of legislation preventing the amendment of an incorrect address on the electoral roll without the agreement of other residents. Under article 16 of the UK GDPR, individuals have the right to have inaccurate personal data rectified.

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Londoner Jon Swinden was left unable to insure his flat after discovering his address had been recorded in five different formats by his bank, TV licensing, the council and utilities companies.

“I received a renewal notice from Halifax, which has insured my home since 1991, and noticed the address on the letter showed the building number, but not the number of my flat,” he says. “I pointed this out, and the correct entry could not be found on the database, so I was informed that I can no longer be offered insurance.”

When he tried to find a quote elsewhere, he discovered his flat number was not recognised by any insurer. “My flat is one of four in a converted property,” he says.

“As far as I can tell, only the basement features as a separate apartment, and the rest are identically listed under the building number.”

Royal Mail explained that multi-occupancy buildings which share a front door have to be recorded as a single property on the PAF. The flats within it are listed individually on a separate database, to which companies can choose to subscribe for a fee. Halifax agreed to renew his insurance after the Observer intervened.

A similar issue threatened to scupper first-time buyer Victoria Smith’s property purchase in London. “We face being unable to secure a mortgage and losing the property because the flat we currently rent is listed as ‘Flat C’ by Royal Mail and my bank, and as ‘Top Floor Flat’ on the electoral roll,” she says.

“It was the same with our previous address. It was ‘Ground Floor Flat’ on the electoral roll, and just the building number ‘37’ with Royal Mail. This has affected my credit report because Equifax and TransUnion have no record of me under the Royal Mail format.”

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Smith and her partner eventually secured a mortgage offer through a different broker.

Householders should ensure their address appears in the same format on the electoral roll, the PAF and all payment accounts, since a failed credit check leaves a footprint that can deter other lenders.

James Jones, from credit reference agency Experian, also advises keeping tabs on personal details held by the three main credit reference agencies. He says: “Checking your credit report from time to time can help spot anomalies like this and get them straightened out before they lead to a financial hiccup.”

* Name has been changed.

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