What Information do Credit Reference Agencies Hold About You?

The 2020 Credit Score Guide – Chapter Three

There’s often confusion about what information is held by credit reference agencies. This is made worse since many British consumers don’t check their credit file to see what data it contains. In fact, last year Experian estimated that almost half of Brits have never checked their credit score before. This chapter will help you understand what is contained in your credit report so you know what to be aware of when paying bills and signing up for financial products.

A credit report depicting the figure of someone's credit rating

Article Highlights:

In this article, we’ll clear up any misconceptions by listing what information is – and isn’t – seen when you make a credit application. We also look at how long the information remains on your credit file and what time-frame lenders are more interested in.

The data credit reference agencies hold about you:

The information on your credit report allows lenders to judge what kind of borrower you are from your present and past credit history. In order to build up a picture of how creditworthy you are, your file contains certain relevant information. Let’s look at what they concentrate on.

  1. Electoral roll and previous addresses

    Your credit report contains any information from the electoral roll and any previous addresses you’ve lived over the past 6 years. The file will also say how long you’ve lived at your present address. Cross-checking the information you give on a credit application is useful for lenders for two reasons.

    First, they can use it as confirmation of your identity and is one of the key ways to check for identity theft. The other is that they’ll be able to contact you easily. If you move leaving unpaid debts (especially utility bills), a mark on your credit report can allow the Gone Away Information Network (GAIN) to track you down to chase you for repayment. If you are struggling with keeping on top of priority bills, read our guide on how to save on gas and electricity bills.

    Your credit report contains any information from the electoral roll

  2. Previous names

    If you’ve changed your name over the previous 6 years (for example, upon marriage or by deed poll), your previous name will also appear on your credit file.

  3. Credit history

    Any lender accessing your credit file will be able to see how much you owe and to whom including credit cards, charge cards, overdrafts, mortgages and personal loans. The report will say what kind of credit accounts you hold, when they were opened, the outstanding balance and whether payments are up-to-date. Want to learn more about credit cards? Check out our introduction to credit cards article.

    If you’re late by up to 2 months, then they’re considered to be in arrears. A default is seen as repayments which are later than 2 months. A default suggests that your financial relationship has broken down and the creditor doesn’t believe that they’ll be paid.

    Your credit limits and your overall indebtedness will also allow lenders to calculate how much of the credit you have access to is being used.

    Your file will also contain information about your spending habits. For example, prospective lenders will be able to see details of unauthorised overdrafts, cash advances on credit cards and any payday loans. Click here to read more about what lenders look for in your credit report when considering you for a mortgage.

  4. Your credit report shows a history of all past credit accounts, when they were opened, the outstanding balance and whether payments are up-to-date.

  5. IVAs, CCJs and bankruptcies

    Your credit report will also give details of any agreements to repay debts such as IVAs (Individual Voluntary Arrangements) as well as County Court Judgments imposed by courts. CCJs are removed if they’re paid off within a month of being issued. Information about personal or professional bankruptcies are also kept on your credit file.

  6. The footprint of credit searches

    Every time you apply for credit, the credit search you give your consent to leaves a ‘footprint’ on your credit file. Later lenders won’t be able to tell if the credit application was successful but will only see the record of the search.

  7. Financial associates

    If you open a joint account with someone, their credit file will automatically be linked to yours. These people are called financial associates and are usually partners, family members or housemates. A shared financial product could be a mortgage, shared bank account or having your names together on utility bills.

    A couple of financial associates are discussing a shared financial product

  8. Fraud history

    If you’ve had problems in the past with identity theft, this will appear on your credit file or you’ll be on the Cifas register. This will alert prospective lenders to carry out further checks to confirm your identity before agreeing to any credit applications.

What information isn’t in your credit file?

Some consumers are worried about what data might be held about them because of concerns about their privacy. Your credit file is just that – it’s about your attitude to credit and your money management skills. Therefore, it doesn’t contain any data about:

  • Your employment history
  • Your job title or salary
  • Any information about savings accounts
  • Details of criminal records (including parking fines, etc.)
  • Council Tax arrears
  • Student loans (unless taken out under the original loan system)
  • Your medical records
  • Your ethnicity
  • Your religious beliefs
  • Your political affiliation
  • ‘Soft’ searches (they will appear on your credit file but won’t be seen by prospective lenders)
  • Any searches you’ve carried out to check your own credit report

Click here for practical tips on how to improve your credit score!

How Far Back do Credit Reports go?

The cut-off point for your credit history is generally 6 years. However, the further in the past any financial problems are, the less weight they are given unless you show a pattern of poor financial decision-making up to the present day.

Defaults which are older than 1-2 years have less of an impact on whether lenders agree to award you credit. They concentrate more on your money management skills from the last 3-6 months when reaching a decision.

Conclusions about the information CRAs hold about you

One good thing about the way that credit reference agencies operate and compile the data is that credit reports are constantly being updated and modified. Even if you’ve had problems in the past, changing your behaviour will have an impact on your credit rating even if it might take time.

We might dislike the idea of information being held about us but credit reference agencies are a necessary evil. Without them, accessing credit would be much more time-consuming and the risks of identity fraud all the greater.

Enjoyed this article? Continue to Chapter 4

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