In the UK, companies called 'credit reference agencies' (CRAs) compile information on how well you manage credit and make your payments. The three main CRAs are:
Each of them holds a file on you, called a credit report (or credit file), although the information might differ between CRAs.
What's in your credit report?
Your credit report typically holds the following information:
- A list of all your credit accounts. This includes bank and credit card accounts as well as other credit arrangements such as outstanding loan agreements or utility company debts. They will show whether you have made repayments on time and in full. Items such as missed or late payments or defaults will stay on your credit report for at least six years.
- Details of any people who are financially linked to you, for example because you've taken out joint credit
- Public record information such as County Court Judgments (called 'Decrees' in Scotland), house repossessions, bankruptcies and individual voluntary arrangements. These stay on your report for at lest six years
- Your current account provider, but only details of overdrafts
- Whether you are on the electoral register
- Your name and date of birth
- Your current and previous addresses
- If you've committed a fraud (or someone has stolen your identity and committed fraud) this will be held on your file under the CIFAS section
Your credit report doesn't carry other personal information such as your salary, religion or any criminal record.
Who looks at your credit report?
When you apply for credit the process usually involves you giving your permission to the credit provider to check your credit report. The term 'credit provider' doesn't only include banks and credit card companies but mail-order companies and, for example, providers of mobile telephone services – if you have a phone contract (but not if you’re on a pay as you go deal).
Employers and landlords can also check your credit report, although they will usually only see public record information such as electoral register information, such as
- Electoral register information
- Insolvency records, and
- County Court Judgements (or Decrees in Scotland)
How lenders use credit reports
Bear in mind that different lenders look for different things when looking at your credit report and deciding whether to lend to you.
How to check your credit report
All CRAs have a statutory obligation to provide you with a copy of your credit report for free. You can access the report online or by asking for a written copy.
You can find out more about how to get a written copy of your credit report from the Information Commissioners Office.
TransUnion (under the brand name Noddle) and ClearScore (who base their service on Equifax data) also offer free access to your credit report for life. So it might be worth applying for this rather than paying for a statutory report.
It is often worth getting a copy of your credit report from all three main CRAs if you’ve not applied for it before or if you’ve not checked it for quite some time. That’s because they might have different information from different credit providers (although there is quite a lot of overlap between them).
Full credit report services
You can get free 30-day trials of more comprehensive credit checking services from Experian and Equifax, which include your full credit report.
However, you normally have to give your credit or debit card details when you sign up to the free trial and money will be taken from your account unless you cancel in time.
Money fitness tip
Remember to cancel the trial service before the free month is up if you don’t want it after that, so you don’t end up paying for a service you're not going to use.
What's a credit score?
Your credit score is an assessment by a particular lender of how good a credit risk you are, based on its own criteria and typically including CRA information.
A CRA might also provide your ‘credit score’ for a fee, but this is just an indication based on the information they hold and isn’t the same as an individual lender’s score.
A good credit score is no guarantee you'll be able to borrow money, as different lenders have different criteria for choosing customers.
How lenders use credit reports
Bear in mind that different lenders look for different things when looking at your credit report and deciding whether or not to lend to you.
Did you know? - Many companies will choose not to lend to you if you haven't always managed your credit well and don't have a good credit rating, while others will simply charge you a higher rate of interest or offer you a smaller amount of credit.
When should you check your credit report?
If you are applying for a loan, mortgage, credit card or other borrowing then it might be a good idea to check your credit report first, if you haven't looked at it for some time.
In any case, it makes sense to check it from time to time to make sure there are no mistakes or that you haven’t missed any payments without realising it.
You can check your credit report as often as you like and it won't affect your credit rating or credit score.
It's normally only when you apply for credit and lenders search your credit report that there's a record left on your credit report.
If you’re shopping around, and not yet ready to apply, make that clear and ask for a quotation or ‘quotation search’.
This is where a lender searches your credit record, to decide whether you’re eligible or to provide a quote, but without leaving a ‘footprint’ on your file.
That way, your credit record won’t be affected. Ask the lender whether they offer this.
What does a Cifas marker on my credit report mean?
Cifas is a national fraud prevention service. It can place ‘Protective registration’ and ‘Victim of impersonation’ warnings on your credit file.
A Protective registration is a paid service which protects your identity from misuse. It’ll stay on your credit report for two years. You can apply on the Cifas website.
A Victim of impersonation is filed by your lender for your own protection if you’ve been the victim of identity fraud. It’ll stay on your report for 13 months from the date of entry.
If one of these is on your credit report, it gives potential lenders a fraud warning, telling them that in the past you’ve been a victim of fraud, or could be particularly vulnerable to fraud in the future.
What does this mean when I apply for credit?
Any application for credit may be subject to further checks to prove your identity. Because this is often a manual check, if you’re applying for credit your application could be delayed.
Having a marker under this section will not automatically mean your application will be rejected. It’s there to protect you from being a victim of fraud.
What if the Cifas marker is there by mistake?
If you think that a Cifas warning is on your credit file in error, you can get in touch with the lender who put it there to see if they’ll remove it.
Keep in mind though that they’re unlikely to remove any entry on your report if they believe the reason the marker was put on your credit file was justified. Lenders are legally obliged to report any fraudulent attempt on your account to the credit reference agencies.
Improving your credit score and correcting your credit report
It is possible to improve your credit rating, sometimes by simply cancelling unused credit cards and there are other steps you may be able to take.
You should also correct any factual errors you spot on your credit file - speak to the CRA or ask the lender direct – see How to improve your credit rating.
See also the financial top tips offering practical help for Service personnel applying for secured (mortgages) and unsecured loans (credit cards, motor finance, etc) produced by the MOD and the representative bodies of the financial sector.
If you're still having problems getting credit you may still have other options - see Where to go if you've been refused credit.