Upheld: incorrect credit file reporting / failure to remove defaulted account complaint against Equifax Limited

Decision detail

Summary

Mr H complained that Equifax incorrectly reported a defaulted loan account on his credit file. The account was defaulted in June 2018 and should have been automatically removed in June 2024, but remained on file until August 2025. Mr H claims this caused him to be declined for a mortgage by lender A, forcing him to accept a higher rate with lender M, costing approximately £2,000 more. While the ombudsman found Equifax likely made an error in not removing the account as required, it could not establish that this error was the sole reason for the mortgage decline, as lender A rejected the application pre-submission based on payday loan criteria without conducting a full assessment. The complaint was upheld but compensation was limited to £150 for inconvenience rather than the claimed financial loss.

The Ombudsman's reasoning

The ombudsman concluded that based on the balance of probabilities, an error occurred at Equifax when updating its records. The default date either was not added or was later removed from Equifax's records, preventing automatic removal of the account in June 2024. However, while Equifax made an error, Mr H could not establish that this error was the sole reason for the mortgage decline, as lender A rejected the application pre-submission based on payday loan criteria without conducting a full application. Therefore, the financial loss of £2,000 cannot be attributed solely to Equifax's error. Compensation is awarded for inconvenience in establishing and resolving the issue, but not for the mortgage rate differential.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website