Credit scores: when a small debt becomes a big problem

This is an audio transcript of the Money Clinic podcast episode: ‘Credit scores: when a small debt becomes a big problem’

Claer Barrett
Have you heard of the butterfly effect? It’s the idea that small, apparently trivial events may ultimately result in much larger consequences. Money Clinic listener Kalyan knows all about it. Back in 2010, he bought an iPad. Thirteen years later, that long-forgotten purchase might stop him from getting a decent rate on his mortgage.

Kalyan
At that point in time, iPads were sort of the shiny new toy . . . 

Claer Barrett
They were.

Kalyan
. . . and for reasons that escape me now, I got an iPad on a monthly contract.

Claer Barrett
So you could connect to the internet and easily go out and about.

Kalyan
Yeah. It probably had like a 3G connection. So I probably found it less useful than I had hoped I would find it. Probably stopped using it about two or three years after having bought it.

Claer Barrett
Well, that happens. But the problem was the £26 monthly direct debit for the data plan was still coming out of Kalyan’s accounts, meaning he had paid more than £3,000 over the years for an iPad he no longer used.

Kalyan
You know, life goes on. You get busy with things you would address, especially if you live in London. And I left this direct debit sort of sit on my account until some point when we were nearing sort of the dying gasps of Covid, I sat down and said, well, this can’t be right because it’s been coming out for years. I must have paid for this device many times over. And I thought that was the end of it. I cancelled it and I naively thought that if someone really wants to get hold of me, they probably could.

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Claer Barrett
Welcome to Money Clinic, the weekly podcast about personal finance and investing from the Financial Times. I’m Claer Barrett, the FT’s consumer editor.

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In this episode, we’ll hear how a small and unexpected debt caused Kalyan a very big problem with his personal credit score. And I’ll be asking a debt expert and one of the country’s biggest credit referencing agencies what Kalyan can do now to put the record straight. But first, let’s hear what happened next.

Someone did eventually get hold of Kalyan. He got a letter through the post, but it wasn’t what he was expecting.

Kalyan
So the letter was actually from a debt collection agency, based up north, and they told me I owed the communication supplier £54 . . . 

Claer Barrett
Another £54.

Kalyan
. . . on top of everything that I paid. And I couldn’t work out exactly why that was. But I thought, look, the easiest thing to do here, if this just finishes the matter, is to pay it. And that’s what I did. I said, OK, well, I am going to call them and clear this off immediately, which is what I did. You know, I was prompt in responding. And that was July of this year.

Claer Barrett
At this point, having cancelled his direct debit and begrudgingly paid the outstanding £54, Kalyan thought the whole thing was done and dusted. He wasn’t prepared for what happened next.

Kalyan
I got an email from one of the credit rating agencies, scoring agencies, saying something has changed in your score. So I went to look at it and it turns out there had been a default recorded on my account.

Claer Barrett
And the default was because you cancelled your direct debit.

Kalyan
Yes. And the default was in sort of this £54 amount. And it had all been reported by the debt collection agency to the credit score, you know, went to my credit file and with at least one of the major scoring agencies or whatever you want to call them, my score had really taken a hit. That to me was the shock because, you know, for me it was an innocent mistake, if anything.

Claer Barrett
Kalyan had naively cancelled his direct debit because he’d struggled to find any paperwork for his old iPad. Plus, the phone company he originally took out his contract with had merged with another one. So he dropped into one of its high street stores. Staff in the phone shop were able to locate his customer record eventually, and although his postal address had changed, he still had the same mobile number and email address on file. They explained that while he thought of his direct debit as paying off the cost of the device itself at a rate of £26 per month, the company’s view was that he’d signed up to an ongoing contract which included airtime. Having signed the agreement 13 years ago, Kalyan no longer had a copy of the terms and conditions, But as far as the phone company were concerned, Kalyan had cancelled that contract with no warning when he cancelled his direct debit.

Kalyan
They could have seen I wasn’t using the airtime and they could have called me or whatever, but they didn’t do that. They just took the money month after month and when it stopped coming in, they treated it as though I violated a credit agreement. I’m sort of perplexed in a way why we let that count as credit, because it’s just a service. But that was the trigger, essentially, you know, you violated the terms of some contract. Therefore, we’re going to . . . 

Claer Barrett
. . . we’ll automatically refer you to the debt collectors.

Kalyan
Well, actually, it wasn’t quite that way, because what I have learned is they may have written to my old postal address. 

Claer Barrett
Right, but you have moved, of course.

Kalyan
I’ve moved. But the first thing that they in the debt collection agency tell you is, well, that’s your fault, you should update your postal address. All I can say is relying on the post just to chase down a debt is very ineffective. I mean, I would have thought that if you’re going to take an action with such serious consequences, that action should be taken by someone who’s done their utmost to get in touch with you or has the best means to get in touch with you. So, you know, a letter from the debt collection agency . . . 

Claer Barrett
That found you.

Kalyan
But . . . 

Claer Barrett
How have you left things with the phone company? I mean, I assume that you’ve complained and said, I don’t think this should have happened to me. I don’t think I’ve been treated fairly. What have they come back and said, if anything?

Kalyan
What they’ve said is that the file is now with the debt collection agency and you should take it up with them.

Claer Barrett
Right. So they’ve palmed you off on to the debt collectors. And have you had a conversation with them about this?

Kalyan
So I spoke to a very nice lady and she was very . . . this is just on the phone. There are lots of I understand completely where you’re coming from, but there was nothing, obviously nothing they could do about it.

Claer Barrett
Once it’s on your file.

Kalyan
Once it’s on your file. And they said, well, the default had been put on by the phone company.

Claer Barrett
Right. So they’ve passed you back.

Kalyan
So they pass you back to the phone company.

Claer Barrett
The fact of the matter is that your credit score has suffered. I mean, can you quantify what this very small, historic £54 debt has done to your credit standing? Where were you before and where are you now?

Kalyan
So I have gone from being a super prime credit borrower.

Claer Barrett
So a near perfect.

Kalyan
Yeah, yeah, actually perfect. Because I paid everything on time for a long time, right? I had a perfect credit score and now I’ve gone to being sort of marginal.

Claer Barrett
To quantify it for us, has there been like a drop of 400 points?

Kalyan
There’s been a drop of 260 points at one of them.

Claer Barrett
Right. If you’ve ever checked your credit score online, you’ll know that most of the credit reference agencies, Experian, Equifax and TransUnion, give you a score ranging from 0 to 999, depending on how good your credit history is. Kalyan had previously had the maximum score of 999, but now one of the agencies had reduced his score to just over 700.

Kalyan
You know, I expect that it will create some complications for me. I’m hoping there won’t be sort of life-altering ones. I don’t, you know, hope they won’t be.

Claer Barrett
What’s worrying homeowner Kalyan is that his fixed-rate mortgage expires next year. He’s a high earner. So despite this blip on his credit file, you would think banks would still be willing to lend to him. But the problem is backdrop of nearly 300 points on his credit score means he might not be offered the best possible rates.

Kalyan
You know, interest rates have obviously gone up enormously since I took out my mortgage. So if it starts costing me a whole lot more, you know, I’m just going to have to explore, well, do I want to take out some of my savings or something and just try and pay down part of the mortgage? Something like that.

Claer Barrett
And while we’re on the subject of how credit scores are calculated, there’s one last additional point Kalyan wants to raise.

Kalyan
I found out that another reason my credit score might decline is because I paid a loan off early.

Claer Barrett
Huh? And that can actually make it go down?

Kalyan
Possibly because, you know, I’ve done some digging, it sounds like the ideal credit profile is not the person with the lowest risk of defaulting. It’s the person who might be the most profitable customer for the bank lender, and that’s the person who doesn’t pay off early, pays all the interest and pays it all off but just on time. That might be what they’re looking for.

Claer Barrett
So with all that in mind, what does he want to ask our experts?

Kalyan
I think, well, one question is whether and this is almost more for the lenders than the credit scoring people, you know, are these credit scores used as an input into lending decisions? So, you know, number one, is it used as an input? Second thing is, why is it so sensitive to something like a small blip? And what work have the credit scoring agencies done to show that there’s some sort of correlation between something like this and the propensity to miss other payments? What have they done to establish all of that? And then the other question is, should, you know, should people like the phone company and the debt collection agency just automatically be allowed to push defaults on to your credit file? You know, especially when you know that they’re not using the best means possible to get in touch with you.

Claer Barrett
They haven’t made enough effort. And finally, perhaps the most pressing question for homeowner Kalyan, whose fixed-rate mortgage comes up for renewal next year . . . 

Kalyan
I don’t really have any answers about how this sort of impairment to my credit score just from this one-off event is going to affect my ability to get a decent mortgage next year.

Claer Barrett
Well, there’s a lot for our experts to get their teeth into here. And joining me in the studio first to discuss Kalyan’s situation is friend of the show, Sara Williams, better known online as Debt Camel. She runs a blog and a very popular Instagram account of the same name. Welcome, Sara.

Sara Williams
Thanks for inviting me on. I’m always interested in credit scores, Claer.

Claer Barrett
Well, you are the first person that I phoned after hearing from Kalyan. Now, obviously, we’ve heard him explain the nuts and bolts of his problem with the phone company and the way that this default has been applied to his file. Now, let’s start with that. Is there anything that he can do to try and get it removed? He’s been engaged in a bit of a pingpong between the phone company and the debt collector. What would you advise?

Sara Williams
The first thing is to stop talking on the phone to people about it and put in what you want done in writing via an email or go to a complaint if necessary. Customer services, too often, they don’t really know what they’re talking about when it comes to credit scoring, and they just often push you off to somebody else or say there’s nothing that can be done. Yes, the phone company can choose to remove the default. It could choose to change the date of the default. The starting point for this is obviously he should have told the phone company he was going to cancel this contract, which he hadn’t been using in practice for a very long while. Everyone’s facing cost of living problems. But you have to tell the firm that you’re cancelling it as well, not just cancel your direct debit. He knows that. So we are down to what he can do now. My first reaction would be he should ask the phone company as a goodwill gesture to remove the default and point out that they didn’t try very hard to contact him because he was still, my guess, is using the same email address and . . . 

Claer Barrett
. . . and the same phone number.

Sara Williams
. . . and possibly the same phone number. In this situation, it’s astonishing how debt collectors and bailiffs can contact somebody really easily. And the creditor just goes, well, we sent you a letter to an address often they knew was wrong because somebody had moved from it. So they didn’t try very hard to contact him and he knew nothing about it. As soon as he found out about it, he paid it very promptly. These are all points in favour of them exercising their discretion and as a goodwill gesture, removing the default is fine. It’s well worth a try with something like this.

Claer Barrett
All great tips for me to pass on to Kalyan. Obviously, the thing that concerns him the most is, you know, this is a big impact on his score, a drop of around 300 points. And it’s going to show up as a default for six years, assuming he can’t get it removed. So for anybody who is going to be remortgaging or indeed needing any type of credit in the next few years, that is a worry. But how much is your credit score used to govern the lending decisions that, say, a mortgage lender might make?

Sara Williams
OK, so for mortgage lenders, it’s worth making one very specific point because mortgages are just so important, which is that if you only want a new fixed, you don’t want to change lenders and you don’t want to borrow more and you have got a mainstream mortgage lender. So all of the big banks and a very large number of the bank building societies have all signed up to the mortgage charter.

Claer Barrett
They have.

Sara Williams
And that says that in this situation, if you only want a new fixed, they won’t do an affordability check and they’re not even going to have a look at his credit record, let alone care what happened to this old airtime contract.

Claer Barrett
So if he sticks with the current lender, he’s not in arrears, he’s up to date . . . 

Sara Williams
He should be able to get a new fixed, probably just by ticking a box on their website which says that you want. So he may well be all right for his mortgages.

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Claer Barrett
Well, that’s one piece of good news. And Sara has another piece of advice for Kalyan.

Sara Williams
Lenders are interested in the data which is shown on your credit record. So getting hung up over whether your credit score is now 10 points higher or 10 points lower, it’s probably not going to make much difference at all. And the other thing you should completely ignore is the label. This is given to your credit score. You know, you might be told it’s fair or excellent or very good. These are just labels put on by the credit reference agencies, and they can differ dramatically, across credit reference agencies. Even if the credit reference agencies have got the same data.

Claer Barrett
Kalyan also wanted to know why a small bit seemed to count for more than anything else in his financial history. He’s kept all his big payments like his mortgage up to date. So why should a £54 default, which will stay on his record for six years, have such a drastic effect on his credit profile?

Sara Williams
I mean, people say to me, you know, you go to prison for less than six years for really serious crimes these days. I do think it’s unreasonable. So if we look at, say, the Australian credit scoring system, they’ve got a couple of things which would help here if we did it in this country. First of all, the default isn’t recorded and less is more than I think it’s A$150. They also drop off after five years, not six years. That’s a step in the right direction. But I think it’s important the whole credit scoring system should be changed so that if you have paid a default, your credit score improves. At the moment it doesn’t. You just get hit with: you missed a payment, you missed three payments, you’re in arrears. That’s a default. The damage is done and you can’t put that right.

Claer Barrett
What would you like to see changed to make the system a more accurate reflection of how a borrower is likely to behave if they’re loaned money?

Sara Williams
I think it’s a combination of a lot of the things we talked about. Not damaging somebody’s score for really small amounts of money. Say they have to try harder to contact people before they actually add new problems there. And for somebody to be able to have their credit score improve if they work their way out the problem. The gentleman said the credit scoring companies should do some correlations and do actual checks. They do. They do a lot of these and that’s how they justify what they’re doing at the moment.

Claer Barrett
Sara’s final suggestion is that we could all do with rethinking our attitude to credit.

Sara Williams
We have a big problem in our society that a lot of what we do is geared around selling us things. And a lot of what the credit industry do is selling us credit. We don’t really have a system which says you don’t have a credit card, you’ve got savings in your accounts, you don’t have any problems paying your rent and bills or anything. You don’t get a good credit score unless you’re actually using credit. And this is very nice for the credit reference agencies and kind of convenient for the lenders because they’ve got a sort of easy method of assessing this, but it doesn’t really make sense. And they should perhaps be putting more weight on affordability checks and less weight on what has happened in the past for what are clearly old historic problems.

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Claer Barrett
The Debt Camel’s throwing down a bit of a challenge there to the credit scoring agencies. So what did they have to say about how the process works? Time to get one into the Money Clinic studio.

James Jones
So I’m James Jones. I’m head of consumer affairs at Experian. We’re a large data company with offices in London and Nottingham in the UK, and we’re probably best known for running one of the UK’s main credit reference agencies. So we look after people’s credit reports, we calculate credit scores, help prevent fraud, do things like that. And my role is specifically around helping educate the public around these sorts of issues.

Claer Barrett
And it turns out James should be well-equipped to answer Kalyan’s dilemma.

James Jones
I’m actually celebrating my 31st year working at Experian, and I’ve been working in this team for more than two decades now. So hopefully I should be well-placed to answer some questions.

Claer Barrett
Well, I suppose the big overarching question is that people are obsessed with credit scores, especially right now. But how do lenders actually use them?

James Jones
So credit scores are a way that lenders make sense of your credit report information. And your credit report can tell you many things, but sort of primarily your track record at managing credit over the last six years and also your current financial situation. What a score does basically is it turns that information into a prediction, essentially the likelihood of you maintaining payments in the future based on information in your credit report. Now, there’s no universal credit score in the UK. You mentioned Experian credit scores, but of course, all the credit reference agencies are available too. And actually some lenders just take the data from a credit reference agency and score that in-house. So no one credit score is gospel, if you like.

Claer Barrett
One of Kalyan’s immediate concerns is how the default on his credit record and subsequent drop in his credit score is going to affect his ability to secure a decent deal when it comes to refinancing his mortgage next year. What does James think?

James Jones
Well, I’ll be honest, it’s certainly not going to help. You know, mortgage lenders want to be sure that you can afford to keep your payments now and into the future. So any blip on your credit report is likely to raise an eyebrow. A default is one of the most serious blips. It shows that you’ve basically broken a commitment to make a regular payment on time to the extent that it will either have been referred into the collections team within the organisation or, I think as in this case, passed on to a professional debt collection firm to try to recover the money. So it’s certainly not the type of thing that any lender likes to see, including a mortgage lender.

Claer Barrett
You know much more than I do about how credit scores work. But would the impact have been the same if this missed payment had been for £54 or £540?

James Jones
I think the key aspect is the default, the fact that a contract has been defaulted on and that is probably the number one thing that influences the score. And as you’ve indicated, it’s sort of quite a serious score hit, certainly initially, because credit scores tend to focus more closely on your most recent credit history rather than something that happened four or five, six years ago. So that’s another thing to say in that although the default is on the credit report for six years, actually as it ages, your listener should find its impact or its negative impact on his credit score is likely to reduce. So maybe there’s a strand of good news there. It’s very important if you have had a default in the past to make sure it’s paid off because an outstanding default is probably a big no-no to many organisations. I think that’s the case here. So that’s one thing ticked off.

Claer Barrett
He has paid it off. Yeah.

James Jones
He has paid it off. The size of the default is, I mean I can only really talk in relation to experienced approach to credit scores, is it just doesn’t have much of an impact because the key issue is the actual presence of a default.

Claer Barrett
Mmm. To play devil’s advocate, James, is it really an accurate indication of his credit risk going forward that he’s missed this very small payment on a 10-year-old iPad?

James Jones
I can certainly understand the frustration. There’s almost a solitary lesson here, isn’t there, in terms of keeping on top of all your financial accounts and your . . . 

Claer Barrett
Not being too gung-ho. 

James Jones
Just checking your bank statements from time to time. And if you spot something you’re paying for that you don’t recognise or you no longer need, then you know, sorting that out sooner rather than later. I guess another thing to say is if you’re moving home, we would strongly recommend using mail redirection . . . 

Claer Barrett
Yeah, I was going to say that. Mmm. 

James Jones
. . . for at least six months, just as a bit of due diligence to try and catch anything, you know that you might have missed and avoid this type of issue.

Claer Barrett
I mean it is a bit costly depending on how long you want your mail redirection to run forward.

James Jones
Well, in terms of costs, I mean that’s something another aspect of credit scores which we’ve not really touched on, and that’s the fact that many lenders use your score not only to decide whether to say yes or no, but for the customers they accept, in some cases, the pricing of the deal . . . 

Claer Barrett
What interest rate you can get.

James Jones
. . . personalised interest rates, credit limits, things like that. So the higher you can build your credit score and if you can get it to somewhere like 997, 998, 999 on the Experian scale, then you’ll not only find you have, you know, hopefully unfettered access to a wide range of credit products, but you qualify for the best deals as well. I think personal pricing is maybe less prevalent in the mortgage market, but certainly if you’re applying for personal loans and credit cards, then your credit score is a factor that goes into what they’re prepared to offer you.

Claer Barrett
Now, let’s just talk a little bit about the process that was involved in Kalyan’s case. Now he thinks that that phone company didn’t really make much of an effort to contact him. They sent the letter through the post, he’s moved house, before they went and called in the debt collectors who, of course, found him instantly. Now, that’s a very specific scenario, of course. But more generally speaking, do you think firms should have to do more in situations like these to show that they’ve made a proper effort to find a customer who, let’s not forget, has been giving them a good chunk of money every month for the last decade?

James Jones
Yeah. Absolutely. You know, I can’t comment on individual firms but it’s, I think it’s reasonable to expect an organisation to make every attempt to contact a customer, you know, if payments become overdue. I mean it’s in their interest because, you know, it’s not cheap to credit check and take on a new customer.

Claer Barrett
Now, considering everything that you know about this case, is there any way that a customer like Kalyan could appeal and ask to have the default removed or even put some kind of correction or explanation on his record? If his application for future credit was referred, they could see an explanation on there.

James Jones
Yeah, it’s a good question. So you can add something called a notice of correction.

Claer Barrett
A notice of correction.

James Jones
To your credit report. That’s the legal terminology. It’s essentially an explanatory statement, up to 200 words that you can add to information on your credit report held by each of the three credit reference agencies. And I should add, it’s something you need to do individually with each one. We don’t share them. To add further information. Now, that can be just circumstantial. You know, I missed a few payment because I was in hospital or something like that, or it can be something about your current situation. So if you had a mental health condition or something like that. So the facility is open to everyone. It’s free. And in this case it might be worthwhile adding a short explanation in terms of what happened. And what that will mean is in the future, any lender doing a credit check will see the statement and should take it into consideration. There’s no guarantee that it will change their decision.

Claer Barrett
But they do look at . . . 

James Jones
But they would, they have to look at the statement. It’s a spanner in the works for an automated decision, so it will refer the application to a person, to an underwriter, and then they will read the statement as well as look at, you know, what a credit score would have been. And then that’s the opportunity for them to take that situation into account.

Claer Barrett
So adding that explanation, however short, could be a valuable thing because instead of getting a computer says, no, your score’s not good enough, it will refer it to a human being rather than an algorithmic one.

James Jones
That’s right. I mean, it’s always down to the lender. It’s their criteria. They you know, they set their own policies and so on. But you would think that if the credit score was maybe just shy of their acceptance mark, there was a small, fully paid default with an explanation, which is clearly, you know, a little bit of a an oversight or a mishap, that they might give the applicant the benefit of the doubt.

Claer Barrett
Now, when it comes to the example of something like a personal loan where you’ve agreed to pay in instalments, say, over 12 months, but you repay the last four in one go rather than paying it off month by month, could that make a positive or negative difference to somebody’s score? That’s something that Kalyan has actually done.

James Jones
Yes. I mean, it depends on the product and the contract, but there may be scenarios where if you pay off a loan early, you get hit with an early settlement charge. So that you should always check in advance because you may be denying the provider the opportunity to charge interest that they’d banked on at the beginning of the contract. So that’s one thing to think about. But in terms of credit scores, you know, paying off debt quicker is a good thing.

Claer Barrett
Great. Well, that’s good to know. Any other common myths of credit scores that while you’re sitting in front of a microphone, you’ve be keen to dispel?

James Jones
Well, one we’ve sort of touched on a thing already is the fact that when you apply for credit, it’s the lender that decides whether or not your application is successful. You know, the credit reference agencies like Experian and the other guys, we provide information into the pot to help guide the lender on that decision making, but it’s always down to the lender to decide. So that’s probably quite a big one. Another one is around addresses. So these days, credit checks are on the person and not the address. Someone else’s information can only come into play. You actually have joint credit with them. So something like a joint bank account or a joint loan or a joint mortgage.

Claer Barrett
Now, one question for you before we let you go. Obviously, Kalyan now faces the task of rebuilding his credit score. It’s dropped down to around 700 and something. He’d like to get it back up again. Well, I’m sure there are lots of other listeners who may be thinking, well, my credit score isn’t as high as I’d like it for whatever reason. What are the best ways that we can boost our scores and improve our chances of getting a well-priced loan, credit card or mortgage?

James Jones
Sure. It’s a good question. The average score on a scale of naught to 999 is just shy of 800, and that’s in the fair segment of our little coloured wheel. So I think many of our customers are on a journey to try and improve their credit scores. The advice I could give any particular person is always dependent on their own circumstances. In this type of case where you’ve incurred a default, I guess the first thing to do is make sure it’s paid off. Another thing I think we touched on is recency. Time is a great healer, certainly in terms of credit scoring. The other aspect of it is looking for opportunities to maybe try and tip the scales a bit in your favour by repopulating your credit report with much more positive information. So if your listener has other financial products, and I’m sure he does, then making sure those are all paid on time, you know, religiously every month using direct debit and so on is absolutely essential. Keeping balances low.

You don’t need a credit card to build a credit score, to be honest. But if someone is on a credit rebuilding journey, getting and managing a credit card wisely can win extra points on a credit score. For example, a well-managed credit card can increase your Experian credit score by about 200 points. Registering on the electoral roll. Not all of us do that. It does correlate with credit worthiness, strangely enough, by about 50 points on a score scale. So that can be a very quick and easy win to add a few points to a credit score.

You used the word boost in your question, I think. And I’m going to take the opportunity just to mention the fact that we have a kind of an open banking driven service where customers can agree to link their bank account data up to their Experian credit score calculation to give us deeper into insights into their regular payments and where we find evidence, further evidence of responsible financial management, we can actually boost someone’s credit score by up to 101 points.

Claer Barrett
Open banking, where you agree to share your day-to-day transactions with a regulated company for 90 days, is increasingly being used by financial firms to provide a more accurate picture of how we’re managing our money before they decide whether to lend us more. There are very strict controls over how this data is used, but obviously read the small print.

Well, we passed on all of the advice and insights from our experts to Kalyan. He continued to badger the phone company and the debt collection agency, and lo and behold, an email arrived. Based on the information he provided, they had decided to cancel the default, just as Sara Williams, the Debt Camel, predicted would happen if Kalyan complained a little bit more forcefully. They didn’t give him any reasons for their decision. But as Sara suspected, it could have been the lack of effort the phone company had made to get in touch with him before passing his file to a debt collector. So in summary, do think through the consequences before cancelling a direct debit. But if a financial firm makes a decision that you think is unfair, don’t be afraid to challenge it.

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That’s it for Money Clinic this week with me, Claer Barrett. And we hope you found this episode useful. If you did, spread the word and please leave us a review. We’re always looking to chat with people about their money issues for the show. If you’re interested in being part of a future episode and are looking for some expert money advice, then email us. Our address: money@ft.com. You can also follow me on Instagram. I’m @ClaerB.

Money Clinic was produced by Philippa Goodrich. Sound design was by Breen Turner, and our editor is Manuela Saragosa. You heard original tunes this week by Metaphor Music. Cheryl Brumley is the FT’s global head of audio.

And finally, our usual disclaimer. The Money Clinic podcast is a general discussion around financial topics and does not constitute an investment recommendation or individual financial advice. For that, you’ll need to find an independent financial adviser. That’s the small print over for now. See you back here next week. Goodbye.