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What to do if a lender ignores your Notice of Correction?

A Notice of Correction (NOC) is a 200-word note you can add to your credit report to give some context for negative information on your file, like missed payments or defaults.

The idea is that lenders will be more understanding if you missed a payment or defaulted because you lost your job or fell ill.

However, while lenders have a legal obligation to review your NOC, they are not legally obligated to consider it. In fact, many will simply ignore it, especially if it reads like an excuse for missed payments. The credit reference agencies (Experian, Equifax, and TransUnion) must include it on your credit report if you request it, but they cannot force lenders to take it into account when making lending decisions.

Why would a lender ignore my Notice of Correction?

Lenders may choose to ignore your NOC for a few reasons:

  • It reads like an excuse rather than a genuine explanation.
  • They don't have time to manually review every NOC.
  • They don't believe the NOC changes your risk profile in a meaningful way.

So while a well-written NOC can sometimes sway a sympathetic lender, especially for older credit issues, you shouldn't expect it to be perceived as too important or to override big adverse events like bankruptcies or CCJs on your credit report.

What should a good Notice of Correction sound like?

To maximise the chances of a lender considering your NOC, follow these tips:

  • Keep it under 200 words.
  • Explain the extenuating circumstances clearly and concisely.
  • Avoid sounding like you're making excuses.
  • Focus on older credit issues, as lenders are less likely to overlook recent problems.
  • And most importantly, make sure the NOC sticks to the facts.

Here's an example of an effective Notice of Correction:

"In 2019, I lost my job due to company restructuring. This led to a period of financial hardship and missed payments on my credit card. I have since found stable employment and have been making regular payments to pay down the balance. The default has been satisfied."

When should I use a Notice of Correction?

A Notice of Correction is most useful in the following situations:

  • Identity theft or fraud: If someone has opened accounts in your name, an NOC can alert lenders to double-check all applications
  • Extenuating circumstances: Job loss, illness, divorce, or other major life events that led to missed payments.
  • Inaccurate information: If there is incorrect negative information on your credit report.

In other words, your Notice of Correction should not be used as an excuse for irresponsible borrowing.

So what can you do if a lender ignores my Notice of Correction?

If a lender rejects your credit application even after reviewing your NOC, you have a few options:

  • Ask the lender for reconsideration. Politely explain that you felt the NOC provided important context and ask if they would be willing to take another look at your application.
  • Apply with a different lender. Not all lenders will weigh your NOC the same way. Shop around to find one that is more willing to consider your situation.
  • Work on improving your credit score. Over time, making on-time payments and reducing debt will help offset the impact of past credit issues, even with an NOC in place.

This final piece of advice is the most important. A Notice of Correction is simply an explanatory note that lenders may or may not consider when assessing your creditworthiness.

A Notice of Correction also doesn’t directly improve your credit score. In a best case scenario, an NOC can indirectly help your score over time by providing context for past credit issues. If a lender is willing to look past a default or late payments due to your explanation, it can open up access to new credit that helps you rebuild your score through on-time payments.

But you don’t need to pray for this best-case scenario to take steps towards improving your credit score today.

The good news is that now there are many apps that can help you build and improve credit. One such app is Wollit.

Wollit works by reporting a fixed-fee monthly subscription as a loan repayment to all credit reference agencies. This helps you build a history of timely debt repayments, which is the main factor that matters for your credit score.

On top of this, Wollit can also report your monthly rent payment to Experian. This can add another line in your credit report that shows lenders you pay your bills on time.

A Notice of Correction can be useful, but having a better credit and bill payment history can reduce the impact of a negative line in your credit report much more than an NOC ever could.

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Terms apply. Results may vary. Improvements to your credit score are not guaranteed. Wollit Credit Builder plans are unregulated.