O2 and my credit file

[Anonymous]

I have a sim only contract.  Been hat way since returning to O2 back in Jan this year.
At the time of taking out my contract, I was told that a credit search would be performed (and possibly again around June when I changed contracts, but still sim only), which I had no problem with.  But since joining O2, I have had a mark placed on my credit file every month and since these appeared, my credit score has dropped quite a bit.

According to the people who you get to speak to on the phone about leaving O2, his is perfectly normal, because I have a contract of some type with O2.  But if that's the case, why don't any of the other contracts I am tied into also appear on my credit file?  Those would be my water supplier, gas & electric supplier, lanlord etc.   Anyway, the advisor told me I would likely find information about this on going thing with my credit file, within the terms and conditions on "My O2".  Yet surely I should have been informed right at the start, that an onhoing mark from O2 will be placed on my credit file for every monh I am still wih O2 (contract of some type).

Is anyone able to direct me please to where in the terms and conditions it states about this ongoing thing please??

Also, I would advise all other contract holders to check their own credit reports and see who are putting markers on their credit file, without the person even knowing about it!

Many thanks, Andy

[Anonymous]

Definitely my account number that's quoted on the credit file.

[MI5]

The point is that you shouldn't be getting that mark, or at least it shouldn't adversely affect your CR.
No one else does, so why you?

[Anonymous]

https://photos.app.goo.gl/HW0rWjKVVV3AKFuA3 that's a sim only so maybe it's showing like that

[MI5]

But no negative impact on your credit score I assume?

[Wa10]

I wonder whether there's perhaps some confusion here between what a "mark" on a credit file is, and whether that's something negative or merely a factual record of account performance.

Clearly a negative marker, whether that's a late payment, a missed payment, a default, an arrangement to pay or a gone away can potentially negatively impact a borrowers ability to obtaion credit, and such markers should only be recorded on a credit file where they are an accurate representation of the account performance - where payments have not been made in accordance with the agreement.

Conversely account performance can be viewed as a positive by prospective lenders where the terms of the agreement have been adhered to and payments made in full and on time, often indicated on a credit report by a row of green dots or zero's.

As a lender, O2 have access to search credit reference agency data before deciding whether to grant a credit facility and open an account. At this stage a search is recorded on the credit file, which is separate to any account performance records, and is merely an indication that a facility was applied for (regardless of whether it's granted or not).

O2 also have a responsibility to report account performance data as part of their agreement with the Credit Reference Agencies, so that other prospective lenders have data on which to base lending decisions, which is why your monthly account performance is reported. When you take out a pay monthly agreement with O2, you are opening a credit facility as you pay for usage charges in arrears.

Usually positive account performance would not be viewed negatively as it's an indication that you are managing your credit commitments responsibly, however all lenders have their own criteria, usually scoring an application (including the CRA data) using their own complex algorithm to decide whether you qualify for their product/service and on what terms. The number of credit applications made in a period of time, amount of outstanding debt compared to both income and available credit, income and outgoings and payment performance are usually factors in this sort of calculation.

This is why a CRA generated credit score is often meaningless, as they aren't a lender and an arbitrary number they generate based on info held on your credit file may not be calculated in the same way or using the same logic as a "credit score" generated by a lenders algorithm when deciding to approve your application.

The fact that the credit score you are seeing from the CRA has decreased over a period of time could be due to a number of factors, or due to nothing at all - as the CRA algorithms are not made public therefore we have no way of knowing how they've calculated their figure.

If you haven't already, check your credit file with the other CRA's too - you'll likely find different accounts being reported to different agencies. Some accounts may report to just one, or to all of them, or even to none at all. They will probably all give you wildly differing "Credit Scores" as well.

Of course if the performance of your account us being reported incorrectly in any way, defintiely contact creditfilereferrals@o2.com as they are the people best placed to check and correct any errors, although they don't have any influence over a proprietary score generated by the CRA I'm afraid.

[Martin-O2]

Thanks for bringing this on to our attention guys. Something certainly doesn't seem right here. 

@Anonymous I will arrange for someone to look into this for you. To do so I'll need a few details so I'll send you a private message so we can talk further. 

[Anonymous]

The figures given by CRA's are confusing to the degree that they dont all use the same methods of obtaining them. Neither does their score come out of the same figure. For instance, Noddle uses a score out of 710, others will give a person a score out of a totally different figure. As such, comparing them becomes something of a headache, at best, and the only way I can work out a "fair" number is to convert each score to a percentage of the maximum attainable.

I still cannot understand why O2 need to enter anything against my credit file without telling me so in advance when I was taking out the contract (sim only).
After all, O2 IS required to tell me that a credit search is going to be performed! Is the customer supposed to assume that a monthly mark will therefore be left on their credit file? If so, what else is it fair to assume that O2 will be doing?

As for them being a lender, I dont really see it that way. Every month, an amount is accrued, and every month the amount is paid off. Just the same as any of my other bills. There is no upfront lump sum of anything handed or paid to the customer. As there would be with a loan or HP etc. So if I had taken a new phone with my contract, it would make perfect sense to me as O2 have stumped up the money for this in advance and I am slowly paying them back.
Because there is some kind of standing charge perhaps? So why no entries from the likes of my utilities companies and internet / landline companies who also have standing charges? Although these are a mix of paying in advance and paying in arrears.

Sorry, but for me, the fact I wasn't forewarned that this was going to happen, regardless of how well or not my account with O2 was run, is just wrong.
Because I have nothing but a sim from O2. Which correct me if I am wrong, but this is free to the customer...

[Anonymous]

Duly replied, thanks Martin.

[Wa10]

It is a credit account @Anonymous which is why your credit worthiness is assessed by way of a credit check before commencement. 

For a 12 month Sim Only contract, you are entering into a binding agreement by which you agree to maintain payments not only for the monthly line rental but also any usage charges incurred on a monthly basis during the term of the contract. For a 1 month Sim Only contract, you are still entering into an agreement and O2 are still providing you with a credit facility for the usage charges. Whilst I'm not suggesting for a moment that you have any intention of doing so, it's perfectly possible to run up usage charges in excess of several hundred pounds in the space of a month, and O2 provide this facility to you on credit terms.

Take for example a credit card (or perhaps a charge card would be a better example) - you are provided with a line of credit against which you can make charges. The credit provider, or lender, assumes the credit risk in relation to your spend until such time as it is paid back in full. If you pay it back in accordance with your agreement, then this is recorded on your credit file - if however you fail to keep to the terms, it's recorded negatively.

It may be the case that your particular utility suppliers don't report account performance to a CRA at all, or they may report to a CRA which you haven't reviewed the report from. Speaking from personal experience, my own utility providers do most definitely report my payment history as I have a credit facility with them, and when I recently changed suppliers a credit check was carried out on me before an account was opened.

I really would take very little notice of any proprietary credit score produced by a CRA as I mentioned in my earlier post, as this has little relevance to any lenders decision making process - they will never have visibility of it, and will use their own criteria for internal credit scoring purposes.  Lots of info here about credit rating, credit scores and credit files. http://www.moneysavingexpert.com/loans/credit-rating-credit-score

Regarding O2 making you aware that your account performance will be reported, this is covered under section 21 of the terms and conditions you agreed to when you took the contract out, and I'd certainly expect similar to apply whenever a credit facility is taken out with any provider or lender. 

Hope Martin is able to check and confirm that the information being reported is correct in your case, and of course to help with rectifying any inaccuracies - however the fact that positive account performance is being reported to a CRA really shouldn't be a concern - this is how the credit industry works.