Every year, many thousands of people fail a credit check. While this is often due to a poor track record in making payments, one of the most frequent causes of failure is one that is completely avoidable - the non-existence of the credit applicant on the Electoral Register.

The Electoral Register or Electoral Roll is the definitive list of everyone who is allowed to vote in the UK. It used to be updated every year using the existing details and those included on the registration forms sent out each autumn by the Electoral Registration Office. However, thanks to a new system introduced by the government called Rolling Registration, the information is now updated each month.

Well for a start, you can only vote, and therefore have your democratic say in the running of this country, if your name is on the Register of Electors in your area. But in terms of passing a credit check, be it for a mortgage, contract mobile phone, rental agreement or personal loan, The Electoral Roll is essential for providing independent proof of identity.

Banks and other financial services companies rely on the Electoral Roll to enable them to very quickly verify that their customers are who they say they are and that they live where they say the live. Not only does this minimise the financial risk, but it is one of the few recognised tools in the fight against fraud and money laundering. The only alternative sources of proof are documents such as a driving licence, passport and utility bills.

Jill Stevens, Director of Consumer Relations at Experian, the largest credit reference agency in the UK, explains why these documents are not as popular with the referencing agencies as the Electoral Roll: "Unfortunately, not everybody has access to these documents. Many people don't have a passport. Many young people don't drive and you don't get a utility bill in your own name if you live in the family home, in student accommodation or even in a shared flat. Even people whose utility bills are paid by their partners are suffering because utility companies don't issue bills in joint names."

Experian estimates that without the Electoral Roll, up to 70 percent of the population would have difficulty proving their identity without additional documentation. Many could present documentation such as a passport and utility bill in a shop, bank or insurance company office, but it would slow the credit application process down considerably. It would also make it impossible for retailers and financial institutions to conduct this sort of transaction over the telephone or Internet, where an increasing volume of financial services are purchased.

"And, unfortunately, many financial institutions do not accept certain paper-based documentation because it is so easily forged, further reducing choice and opportunity to consumers," concluded Jill Stevens.

Until recently, each credit reference agency maintained their own copy of the Electoral Roll. However, this situation has changed following a court case in which retired accountant Brian Robertson took his local authority court. He alleged that the Council was in breach of the Human Rights Act by selling information he had provided for the Electoral Roll to commercial organisations for direct marketing purposes, without his consent.

In his judgment, Mr Justice Kay ruled that it is illegal to sell the Electoral Roll to any commercial organisation for any purpose, unless voters are able to object. The judgment highlighted that the Data Protection and Human Rights Acts conflict with the Representation of the People Act, which makes it a statutory obligation for local authorities to make the Electoral Roll available for sale to commercial organisations. In the resulting confusion, local authorities were advised by the Electoral Commission to withdraw the Electoral Roll from sale immediately pending a policy statement from the Department of Transport, Local Government and the Regions (DTLR).

The High Court Ruling was made in November 2001 but the DTLR has yet to publish its policy statement in response to the judgment. In the meantime, Electoral Roll records maintained by the credit reference agencies for use by the financial services industry and many other organisations, including the public sector, cannot be updated.

The effect of this court case is that the credit reference agencies have been unable to update the Electoral Roll since September last year. This is affecting anyone who has moved home since last summer - in excess of one million people - and young people, particularly those who have turned 18 since the court ruling last year, as they are even finding it difficult, if not impossible, to obtain credit cards, loans, mortgages, mobile phones or even to rent televisions.

To find out if your name is on the Register of Electors in your area, you will need to contact your local Electoral Registration Officer. You can find the address of the officer that maintains the record for your constituency online at the following address:

http://www.elections.dtlr.gov.uk/officeraddress/index.htm

There are two things that you need to do if you find that you are not on the electoral register:

• Update your details using the rolling registration system. When you move house you will need to update your details on the electoral register. The register is updated every month. Click on www.rollingregistration.co.uk to download an electoral registration form and send this to your Electoral Registration Office. In Northern Ireland, contact the Electoral Office for Northern Ireland.
  
  
• Contact the credit reference agencies The only way to ensure that you haven't been excluded from financial services for reasons relating to the electoral roll is to contact your local authority and ask for written confirmation that you are on the Electoral Roll, and then send it to Experian and the other two agencies. They will then update the records and you will no longer be at a disadvantage.
  
  The only drawback to this is that the council could charge you anything between £5 and £25 for this service. Many councils do not have the resources to provide such confirmation and some just refuse. If this is the case, you can contact the agencies and they should help you add a 'Notice' to your credit file explaining why you don't appear to be registered at a particular address.

The addresses of the three credit reference agencies in the UK are:
Experian: Consumer Help Service, PO Box 8000, Nottingham NG1 5GX
Equifax: Credit File Advice Centre, PO Box 3001, Glasgow G81 2DT
Call Credit: Consumer Services Team, PO Box 491, Leeds LS1 5XX