An unpaid Three mobile bill wrecked my credit rating | Money

I have discovered a £61 default on my credit report due to an unpaid phone bill – which is now ruining my life. At the end of 2015 I started a new job that offered a phone. I called my provider, Three, to cancel my existing mobile phone contract. I was told I was all paid up and owed nothing. Fast forward to September last year, when I was rejected for credit and found, to my horror, the default had been on my account for more than a year. I had received no email from Three asking for this money. It later emerged paper demands had been sent to my mother’s old address. I can’t understand this, as all my previous bills were paid by direct debit.

As soon as I got hold of this demand, I immediately paid it. I didn’t think to dispute it at the time, in case it made things worse. I am now being punished.

I can’t get the house I saved up for, nor can I get a mobile phone contract. It is even affecting my partner’s job prospects – he was told his link to me could stop him getting civil service security clearance. The default will sit on my account for at least six years.

EB, London

Sadly, we get a letter like this every few months or so, and it shows how missing one small bill can have a dire effect on a person’s credit rating. That said, this case is ridiculous. Three has admitted to us that you were told your account was fully paid up at the time. It says the reason your account remained open was that you asked for a Pac code. It says it told you the account would remain open if you didn’t use this within 30 days – which you didn’t. Although it admits you didn’t use its service after you cancelled, it has refused to remove the default.

James Jones at Experian has helpfully come up with some practical steps. He advised adding your old address to your file, and your own comments to the entry to register your side of the story. “While this won’t affect the score, it could help future (credit) applications,” he says. It’s ridiculous that a disputed payment of less than £100 can have such an impact. Some people have successfully sued utility firms after they mistakenly put a default on their file, and you could look at that, if you feel Three is completely at fault.

The moral of the tale is keep addresses up to date and to monitor accounts that are supposedly closed.

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