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Almost everybody has a credit file. The files give a detailed account of any credit you have or that you’ve had in the past. Lenders look at your credit file to see whether you are a good or bad risk. Someone else could also be mentioned in your credit file if you have had a joint loan or credit agreement with them. It’s called financial association.


What does Financial Association mean?

This is when you have taken out credit jointly with another person. The fact that you have a joint credit agreement means that you are financially associated.


Who is and isn’t a Financial Associate?

The person with whom you have the joint credit agreement is your financial associate. It doesn’t mean necessarily that they are your partner. It could be someone you live with or your business partner. It could even be a parent. Financial associates are the people that have taken out credit with you and you’ve both signed the agreement.

For example, if you have had a bank account, a mortgage, or a credit card with someone else. It also includes and County Court Judgments awarded against you and your financial associate.

Your relatives, your partner or the person you are in business with won’t be financial associates if you don’t share any credit agreements with them. Your joint utility bills don’t make you financial associates and nor does the fact that you live with someone else. If you move into a new home and the previous occupants had poor credit, this won’t affect your credit score. It doesn’t link you with their bad debts in any way, unless you knew them and had a shared credit agreement.


How can a Financial Association affect you?

It won’t affect your credit score, whatever score you have will be safe. But, you might still have a problem getting loans or any other form of credit if the person you’re associated with has a bad credit record. This is because if your associate is unable to pay any debts you have together, you might have to pay the whole debt instead of just half of it. A lender might think that giving you more credit is a risk. This is because if you do have to pay your associate’s part of the debt it might put you in financial difficulty.

Do I have to pay a partner’s half then?

If you have a joint credit agreement and one party doesn’t or isn’t able to pay, yes. The lender will come to you for the rest of the debt. If the matter goes to court, you will be issued with a County Court Judgement in both names.

That’s why you must be careful with joint credit agreements as you might have a partner who doesn’t pay their share. Then, if you can’t pay, through no fault of your own you will end up with a County Court Judgement.



How do I get rid of a Financial Association?

First of all, you must make sure that anyone that is owed has been paid. Then close any bank accounts or agreements by contacting the appropriate department. After that, you should let the credit agencies know that you have taken this action and ask for the association to be deleted from your file.


Which Credit Agency should I inform?

It’s best to inform all three. Different lenders use different agencies, so by telling all three you will have covered yourself. The three main UK agencies are Experian, Callcredit and Equifax.


How will I know it’s been removed?

The agencies will confirm by email, but if you want to be doubly sure then order a snapshot of your credit report a month or two afterwards. Callcredit will give you a snapshot free of charge and Equifax and Experian charge £2.00. If you can still see the association get in touch with the agency again.

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