Have you had letters through the post from credit card companies or debt collection agencies addressed to the previous occupants of your home?
If you have, you probably already know that the lenders can’t chase you for the money, because it’s not your debt.
But you might be wondering about whether it affects your credit history. Well, you’ll be relieved to hear that you can sleep soundly knowing your credit history will not be affected in any way.
By person, not address
Regardless of who lived in the house before you, their credit history will never influence your personal credit report.
The only time where someone else’s credit history can affect yours is if you have ever taken out joint credit – like a mortgage or loan – or a joint bank account with someone else. It’s unlikely you’ll have done this with the person who used to live in your home, so you shouldn’t have to worry about this. Your credit history is personal to you, and your address doesn’t hold a credit history of its own.
If you are getting letters through for the previous owner, it can be quite stressful, especially if the lenders are threatening legal action. The best thing to do in this scenario is to return the letters to the sender (if the address is on the letter) with a covering note reading ‘debtor no longer lives at this address’.
Most lenders should stop sending you letters once they get this, but some may continue to put debt collection letters through your door. If they do, try ringing the number on the letter and explaining the situation to them. Let them know that you have bought the property and that they can check this with the Land Registry if they wish. If you’re a tenant, then direct them to the landlord or letting agency.
To be extra careful, you could keep a copy of your Land Registry documents or your Tenancy Agreement in the house in case bailiffs show up at your doorstep.
Keep an eye on your credit history
Even though the previous owner’s debt won’t affect your credit history, it still pays to check it often. The three credit reference agencies usually update their reports once a month, so it’s a good idea to get into a habit of checking them monthly. You can do so for free using ClearScore or Noddle.
Checking your credit history regularly means you’re alert to any changes that take place, including any mistakes that can sometimes crop up. Finding a mistake early means you can get in touch with the lender in question and ask them to remove it before it causes you any problems.
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Intelligent Lending Ltd (Credit Broker). Capital One is the exclusive lender.