Credit Reference Agencies, Credit Reports and Credit Scores. What does it mean for me?

What are credit reference agencies?

Credit reference agencies are companies who collect information about people from several sources, including data in the public domain such as the electoral roll, public insolvency register as well as information provided by lenders.

Credit Reports

To determine risk, lenders need a comprehensive understanding of your suitability to take on credit.

The leading credit reference agencies in the UK are:-

So, you do not have a single credit report nor a universal credit score – but one from each agency.

For some reason, the Equifax score is out of 700. Experian out of 999 and TransUnion is out of 710.

How can I see my credit reports?

There are several online services where you can view your reports.

How are credit scores calculated?

Every credit score is individual and calculated by a formula that evaluates the information on your credit report. The score then identifies your level of credit risk.

Why do lenders use credit ratings?

Credit ratings provide a guide to risk from credit report data. The higher your score, the lower the risk lenders think you will be when offering new credit.

For more information see Understanding Your Credit Report

Does everyone have a credit rating?

Anyone who has had credit has a credit file. To calculate your score, the credit report must contain at least one account that has been active for more than six months and one account that has been updated in the past six months. This ensures that there is enough recent information to calculate a final score. Your credit score is not published if there is a fraud statement on your credit file.

Factors that affect a credit score

Five main factors determine your credit score. These are, listed in the usual order of importance :

  1. Your payment history
  2. The amount of money owed.
  3. The length of your credit history
  4. The new credit you are applying for

For more information see How To Improve Your Credit Rating

Correcting error and disputing entries file

You can request a credit reference agency to put a Notice of Correction on your file explaining why you think something to be misleading or why you got into debt. The notice is limited to 200 words and will be rejected if it contains information which is deemed by the credit reference agency to be abusive, trivial or inappropriate for publication due to other reasons. It must not refer to a third party by name.

Approved Notices of Correction are viewable to anyone reading the file. Most lenders use computers to make credit decisions. If there is a Notice of Correction on your record, your application may be referred to a real person, who will decide whether your credit application is approved.

For more information see Fixing Errors On Your Credit Report

Please call 0800 088 2053 or a contact us if you have any questions or require some assistance with your debts.