What has affected my credit rating?

Q As a professional with a good salary, I was recently horrified to be refused credit when buying a computer. Earlier this year I was served a bailiff's notice for one month's unpaid council tax from a few years ago. I paid up very quickly. Is this the cause of my bad credit rating? How can I confirm this? What can I do about it? I was hoping to remortgage in the near future. Will this cause problems?

PK

A If you pay your council tax in installments and miss a payment, you are normally sent a reminder. If you ignore the reminder, the tax bill for the full year becomes due. The next step is a summons, followed by a full liability order at a court hearing. At this point you will be served with notice of full payment due, though some councils will allow you to
continue with installments if you pay up promptly. Bear in mind that by this stage you
will also have court costs to pay - a summons will set you back around ?35, for example.
But if you continue to ignore the requests for payment, your case will be handed to a bailiff, which is what has happened to you. Council tax arrears are handled by certificated bailiffs and they normally serve notice to you to pay the outstanding debt within 13 weeks. I'm assuming that you paid the debt within that period as you say you paid up 'quickly'.

However, recovery of council tax debts is organised through the magistrate's court -
and action in this court does not affect your credit rating (even though non-payment of this sort of debt can result in imprisonment!).

You may have been turned down for credit for a reason unconnected to this bailiff's notice but it's important to check your credit files with Experian
and Equifax, the two largest CRAs in the UK. For ?2 each, these agencies will send you a copy of your credit file, which lists all previous credit arrangements you have held, including credit cards, loans, mortgages and hire purchase agreements, and your payment history on all of them.

If there is a mistake, you have the right to have it corrected. If there is nothing amiss on either record, you will just have to chalk this one up to experience. Nobody has an automatic right to credit, after all - it's entirely up to the individual retailer whether to grant it. But at least you will have the comfort of knowing that future mortgage applications won't be affected.