Car Finance Claim — Credit File Correction Under PS26/3

Scheme status (updated 5 August 2026): parts of the FCA motor finance redress scheme are temporarily suspended while the Upper Tribunal considers legal challenges. Lenders do not currently have to calculate or pay compensation under the scheme, the original decision and payment dates no longer apply, and no payment under the scheme is guaranteed. If the scheme proceeds, first payments are expected in 2027 at the earliest. Any dates mentioned below were set before the suspension.

Most people focus on the cash payout when making a car finance claim. But the FCA’s PS26/3 scheme also requires lenders to correct adverse credit information linked to mis-sold agreements. If your credit file shows a missed payment, default or county court judgment connected to a car finance agreement that included undisclosed commission, that adverse mark may need to be removed as part of your redress.

What Is Credit File Correction?

Credit file correction is a non-cash element of the PS26/3 redress scheme. Where a mis-sold car finance agreement contributed to adverse information appearing on your credit record, the lender is required to remove or correct that information as part of the overall redress. This can have a significant practical impact — affecting your ability to get a mortgage, personal loan or new car finance.

What Adverse Information Can Be Corrected?

• Missed or late payment markers — where you fell behind partly because the inflated interest rate made the agreement unaffordable
• Defaults — where the lender formally defaulted the agreement after missed payments
• County Court Judgments (CCJs) — where the lender obtained a court order for unpaid amounts
• Debt management plan entries — where you entered a plan to manage arrears on the agreement
• Repossession entries — where the vehicle was repossessed following missed payments

The connection between the mis-selling and the payment difficulty must be established. Where the affordability of the agreement was directly compromised by the inflated interest rate, the case for correction is strongest.

How the Correction Works

When your lender calculates your redress, they must also assess whether your credit file needs correcting. They then contact Experian, Equifax and TransUnion and request removal or correction of relevant entries. This typically takes 4-8 weeks from the lender’s instruction. You do not need to contact the credit reference agencies separately — the lender is responsible for instructing them.

What If the Lender Does Not Correct Your File?

Write to the lender’s PS26/3 complaints team specifically requesting the credit file correction element of your redress. If they refuse or do not respond, escalate to the Financial Ombudsman Service — the FOS has the power to direct lenders to correct credit files and can award additional compensation for distress caused by incorrect adverse information remaining on your file.

You can also raise a dispute directly with each credit reference agency under UK GDPR if you believe information on your file is inaccurate.

How to Check Your Credit File

• Experian — free statutory report available
• Equifax via ClearScore — free
• TransUnion via Credit Karma — free

Check all three — different lenders report to different agencies and each may hold different information.

Credit File Correction and Your Cash Compensation

Credit file correction is separate from and in addition to the cash redress payment. Receiving cash compensation does not mean your credit file has been corrected. Both remedies are independently assessed and applied.

Frequently Asked Questions

My car finance agreement ended years ago with no adverse marks. Can I still claim cash compensation?

Yes. The absence of adverse credit information does not affect your right to a cash redress payment. Credit file correction is only relevant if adverse information was recorded.

I have a CCJ from a car finance lender. Will this definitely be removed?

Not automatically. The CCJ must be linked to an eligible agreement and there must be a connection between the commission inflation and the payment difficulty that led to the CCJ. If both conditions are met, the lender should instruct the court to set aside the judgment. This is more complex than removing a missed payment marker and may require FOS involvement.

Can I get compensation specifically for the damage to my credit file?

Yes. If the incorrect adverse information caused demonstrable harm — for example you were refused a mortgage or paid higher rates on other products — the FOS can award additional compensation beyond the standard hybrid remedy.

Related Guides

How Is My Compensation Calculated?

Will a Car Finance Claim Affect My Credit Score?

Car Finance Claim with Bad Credit

FCA Car Finance Redress Scheme Explained

Back to Car Finance Claims Hub

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Think You May Have a Motor Finance Claim?

The FCA estimates average compensation of around £830 per eligible agreement, but eligibility and payment amounts vary. Some customers may receive nothing. Complaints about agreements started from 1 April 2014 should be submitted by 30 June 2026 to be considered under the earlier timetable. Different dates apply to older agreements. The scheme is currently subject to legal challenge, so dates and payment timings may change.