Personal Finance

The UK’s Three Main Credit Reference Agencies

The City of London

The UK Credit Score Guide 2018
Chapter One

Story Highlights:

In this article, we look at the role of Experian, Equifax and Callcredit and how they operate. You’ll be able to read about:

  • What life would be like without credit reference agencies (CRAs)
  • The important role of CRAs
  • The role of CRAs in fighting crime and debt recovery
  • How similar the information held about you at each agency is
  • What the best credit score is
  • How much power CRAs possess

There are a number of misunderstandings about how credit reference agencies (or CRAs) work. Therefore, this article explains how they operate and the important role they play in the financial sector.



What would life be like without credit reference agencies?

Although you might worry about the thought of agencies holding information on you, they have a crucial role to play. Without them, every time you applied for credit, the financial institution would have to do its own check on your creditworthiness. Not only would this slow down your application but it might not be so thorough and accurate. Making decisions without all the necessary information means companies might make the wrong decision about approving or refusing credit. Also, it would increase the risk of fraudsters getting away with identity fraud – a growing problem in the UK.

The important role of credit reference agencies

Credit reference agencies collect and collate all the information held about you as regards your management of credit. Their data reveals how well you’ve managed your personal finances in the past as well as the financial commitments you have at present. From this financial history, credit providers can decide how great a risk you represent if they were to lend you money.

A young lady is applying for credit with the help of an experienced colleague

CRAs (like Experian, Equifax and Callcredit) are independent bodies and don’t ‘own’ this information about you. Instead, they hold the information provided by lenders and from public records and share it with financial institutions when you make a credit application.

Their data is updated every 4-6 weeks with information supplied by lenders and other companies who you have a financial connection with. As well as banks and building societies, these could be utility companies, mobile phone operators, social housing providers, credit card providers and major retailers.

It is possible that the data held on you by the three main agencies is slightly different. This can have an impact on your credit application.

Information held about you is bound by the terms of the 1998 Data Protection Act. This means you must give your permission for someone to access information about you. It’s strictly forbidden to check another person’s credit record.

The role of CRAs in fighting crime and debt recovery

Apart from checking information for any inconsistencies and mistakes, CRAs have a role to play in verifying someone’s name and address to prevent identity theft and fraud. They are also used to combat money laundering and help in the recovery of debts. Their data is consulted by government bodies to check entitlement to certain benefits and to recover unpaid taxes and other such money owed.

How similar is the information held by CRAs?

Lenders should share their information with all 3 credit reference agencies. However, this isn’t always the case. You might find that the data held on you by the 3 main agencies is slightly different. This can have an impact on credit applications since it’s quite possible that you have a better score with one agency compared to another.

It is strictly forbidden to check another person’s credit record

Lenders don’t always use the same agencies either when carrying out a check of your creditworthiness. Some financial institutions use one agency whilst others use 2 or might even consult all three. This is worth knowing before you apply for new credit.

What is the best credit score to have?

Another difficulty with the 3 credit reference agencies in the UK is that there’s no such thing as a universal credit score. Each agency has their own way of ‘scoring’ individuals and what weighting they give to the various pieces of information.

A young man who is looking to apply for credit is checking his credit score online at his office

Experian uses a scoring system of 0-999; Equifax have a scale that goes from 0-700 while Callcredit scores range from 0-710. This means that you should pay less attention to the number itself and more to where it falls within the range. For example, a score of 560 is considered ‘poor’ for Experian while it falls in the ‘excellent’ band for Equifax.

How much power do CRAs have?

Another thing to bear in mind is that CRAs have no personal axe to grind. They present the information as it’s been supplied to them without any comments (positive or negative). They never recommend whether a credit provider should lend you money and nor do they possess a blacklist.



The decision about whether to approve your application is made by the lender alone. Of course, your credit report will be one of the factors they consider but it won’t be their sole criteria. They’ll also take into account your application and the personal details it contains.

Conclusions about the UK’s main credit reference agencies

Although the idea of CRAs might conjure up pictures of ‘Big Brother’ watching everything we do, they play a crucial role in the financial industry. As long as they ensure that the information held about us is accurate and up-to-date, they can be used to speed up credit applications and promote responsible lending.


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About the author

Thomas Henderson

Thomas worked as a consultant in personal finance in the UK for 18 years. He has found a passion in sharing his experience on familymoney.co.uk

Thomas also takes pleasure in woodworking, reading and observing stock market trends.

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About The Author

Thomas Henderson

Thomas worked as a consultant in personal finance in the UK for 18 years. He has found a passion in sharing his experience on familymoney.co.uk

Thomas also takes pleasure in woodworking, reading and observing stock market trends.

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