How to write a notice of correction

Something not quite right on your credit report? We break down what a notice of correction is – and why you may want to write one.

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

Concentrated young african american black guy sitting on heated floor at modern coffee table in living room, looking at laptop screen

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

If you are looking to borrow money, then knowing what’s on your credit report can be essential. What you may not know is that if there is something that you think is incorrect or misleading, you can add a notice of correction to your report. We’re here to break down why you may want to do this and how to go about doing it.

What is a notice of correction?

A notice of correction is a short statement that can be added to individual items on your credit report. These are things that you believe create a misleading impression of your financial habits. For example, there may have been an occasion where you missed a credit card repayment because of illness. Or you may have been a victim of identity theft.

A notice of correction must not be longer than 200 words and should explain why a debt is showing up. Its purpose is to highlight that a missed payment is out of the ordinary for you.

The main thing to bear in mind is that a notice of correction is only to be used for one-off incidences. If you regularly miss your repayments then this suggests a consistent pattern.

How do you write one?

You can write a notice of correction yourself. Or, if you would prefer, the text can be prepared with the help of an organisation like Citizens Advice or a solicitor.

It needs to give a clear and accurate explanation as to why you think the individual item is incorrect or misleading. The trick is to steer clear of emotional language. It needs to be based on fact rather than your own personal opinions on the matter.

So if it is a case that you missed a payment because the bill didn’t arrive in time, try to back this up with relevant dates. However, make sure that whatever you write is non-discriminatory and that it doesn’t make reference to another individual or organisation.

Once written, you just need to contact the relevant credit reference agency. They can then add the notice of correction to your report.

Do lenders read it?

Lenders are legally obliged to read a notice of correction. However, they don’t have to take them into account when deciding whether or not to lend you money.

Unfortunately, over time, notices have become devalued. They can be seen as ‘excuses’ for missing payments and can slow down credit applications.

However, they can be helpful if you have been a victim of fraud. Lenders then know that any applications in your name will be subject to additional manual verification checks.

Takeaway

When applying for a credit card, loan or mortgage, it could be a good idea to check out your credit report before making an application. If, when doing this, you spot something that you think is incorrect or misleading, this your opportunity to add a notice of correction.

Just remember that notices should be used sparingly on individual items that are out of character for you. They can be a useful tool if you have been a victim of identity fraud, but try to avoid using them as something to make excuses for poor financial management.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

More on Personal Finance

Note paper with question mark on orange background
Personal Finance

Should you invest your ISA in a model portfolio?

Which model ISA portfolios offer both high performance and low fees? Hargreaves Lansdown, Interactive Investor and AJ Bell go under…

Read more »

Economic Uncertainty Ahead Sign With Stormy Background
Personal Finance

Is it time to exit emerging markets investments?

Investors may well be sitting on losses from emerging markets funds. Is it worth keeping the faith for a sustained…

Read more »

Personal Finance

Share trading? Three shares with turnaround potential

Share trading has been difficult in 2022, but which companies have turnaround potential? Jo Groves takes a closer look at…

Read more »

Man using credit card and smartphone for purchasing goods online.
Personal Finance

Revealed! Why Gen Z may be the savviest generation when it comes to credit cards

New research reveals that Gen Z may be the most astute when it comes to credit cards. But why? And…

Read more »

Environmental technology concept.
Personal Finance

The 10 best-performing sectors for ISA investors

The best-performing sectors over the past year invested in real assets such as infrastructure, but is this trend set to…

Read more »

Road sign warning of a risk ahead
Personal Finance

Recession risk ‘on the rise’: is it time for investors to worry?

A major global bank has suggested the risk of a recession in the UK is 'on the rise'. So, should…

Read more »

pensive bearded business man sitting on chair looking out of the window
Personal Finance

1 in 4 cutting back on investments amid cost of living crisis

New research shows one in four investors have cut back on their investing contributions to cope with the rising cost…

Read more »

Image of person checking their shares portfolio on mobile phone and computer
Personal Finance

The 10 most popular stocks among UK investors so far this year

As the new tax year kicks off, here's a look at some of the most popular stocks among UK investors…

Read more »