Are Sunderland residents the worst in the UK with their money?

Retro Photo Filter Effect Blackpool Tower, from the North Pier, Lancashire, England, UK

Sunderland has topped the kind of list you don't want to be on - a league table of the areas where people are worst at managing their money. It came in just ahead of Kilmarnock, Blackpool and Liverpool. But are people in these areas just making a dog's breakfast of budgeting, or is there something else going on?

The list was compiled by ClearScore, the free credit ratings company. It looked at more than 2.5 million credit scores to see where those with the highest scores live - and where those with the lowest scores are.

The ten best areas for managing money
Kingston Upon Thames
Lerwick - Shetland Islands
St Albans
Hemel Hempstead

The ten worst


You could argue that one lists demonstrates areas where people are budgeting experts - and the other reveals where the financial dullards live.

However, that would be to overlook the enormous elephant in the room. The list of those with the best credit scores is overwhelmingly dominated by well-heeled areas (often in the stockbroker belt), where people are on good salaries and can easily afford to make ends meet. Others on the list have famously low costs of living, so even where incomes are not in the stratosphere, it's not too difficult to keep the wolf from the door.

Those areas that are home to the worst scores are also home to some of the poorest communities in Britain. Many are on horribly low incomes, and have borrowed out of desperation. They cannot afford to pay for the basics, let alone pay interest on borrowing on top of that - or pay back the debt - so it's no wonder their credit scores have suffered as a result.

This list isn't a reason to berate the people of Sunderland, Blackpool and Liverpool for their devil-may-care attitude and cash squandering, it's a clear demonstration that low incomes can so easily lead to unaffordable debt, which destroys credit ratings.

Ironically, once their credit rating is trashed, it leaves the most vulnerable in the hands of payday loan companies and loan sharks - further compounding an already desperate situation. Meanwhile, the comfortable folk of Kingston Upon Thames and Guildford can have their pick of 0% introductory periods on their credit cards.

But what do you think? Does this list reveal a painful inequality of access to affordable borrowing across the country - or is it the natural consequence of a society where people all live beyond our means? Let us know in the comments.

How to dispute your credit record
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How to dispute your credit record

Don't wait until you need to apply for credit to view your credit record – do it now so you know where you stand and can deal with any disputes. When applying for credit, you give the lender permission to view your record, so it makes sense to view it yourself first.

You can access your record via any of the main credit agencies in the UK. By law, all the credit agencies are required to provide you with a one-off copy for just £2 so don't be hoodwinked into signing up to pay a monthly fee.

Your report shows what credit accounts you've had and whether you've made repayments on time and in full. According to Experian, items such as missed or late payments stay on your credit report for at least three years, while Court Judgments for non-payment of debts, Bankruptcies and Individual Voluntary Arrangements stick around for around six years.

Your credit report shows the current address at which you are registered to vote as well as details of other addresses you've been linked to in the last six years. Another section lists people you have a financial connection with, such as a joint mortgage. When you apply for credit, lenders are able to look at their credit history as their circumstances could affect your ability to repay what you owe.

Scrutinise your record to make sure there are no mistakes. Even a minor error such as an incorrect address or wrongly linked account could hinder your chances of being approved for credit so make sure all your details are correct and that all your borrowings are on record. If there is a discrepancy, contact the three main credit agencies to get it corrected.

A default notice is note that a lender puts on your credit file if you fall behind with your payments. It is a warning sign to future lenders about your reliability to repay credit and could mean that they will be less likely to lend to you or will increase the interest rate.

If the default notice is incorrect, perhaps because you have repaid the loan in full or did not take out the credit and suspect that you have fallen victim to fraud, you can apply to have a default notice removed. A default notices will only be removed if it is factually incorrect – not simply because you are embarrassed by it.

Start by writing to the agency asking it to either remove or change the entry that you think is wrong. It will investigate the matter and find out whether you have been the victim of ID theft or a bank's mistake.

Within 28 days from receipt of your letter the agency should tell you how the bank has responded. If the bank agrees to change the entry, they will authorise the agency to update their records. They should also send updates to any other credit reference agencies they use.

You can also contact your lender directly to query a mistake. If the lender agrees to the discrepancy, ask them to confirm this in writing on their letterhead and send a copy to the agency, asking them to update your file.

If you are unhappy with the response or would just like to explain a missed payment on your file you can send a Notice of Correction. This is a statement of up to 200 words that will be added to your file. Although lenders don't have to take this information into account, it at least gives you the chance to tell your side of the story.

Experian states that agencies will also help you escalate the dispute to a third party arbitrator if necessary, such as the Information Commissioner's Office.

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