The UK Credit Score Guide 2020

Although credit reference agencies have played a major role in the UK financial sector for over two decades, there’s still a great deal of mystery and confusion about how they operate.

One of our reasons for writing this set of articles was to clear up many of these misconceptions – not only about the agencies themselves but also about credit scores and credit reports.

How do credit reference agencies operate?

Chapter 1 is an overview of how credit reference agencies work concentrating on the UK’s three largest: Experian, Equifax and Callcredit. We begin by imagining what life would be like without them and examine the role that they play in greater depth. We answer questions about how similar the information they hold is and how much power they have. Who really decides whether a consumer is offered or refused credit?

Chapter 9 is also an overview of credit reference agencies and credit scores but is devoted to dispelling some of the common myths about them. Why not read it and see how much you really know about them?

Credit scores, credit ratings and credit reports

Chapter 1 also attempts to answer the question about what a good credit score is. Although ‘credit score’ and ‘credit rating’ are often used interchangeably by both consumers and the media, they aren’t synonyms. In Chapter 2 we explain the difference between them before listing what information lenders concentrate on when they access your credit report.

Some people are very distrustful about the idea that credit reference agencies hold data about them. Some of their suspicions come from the fact that they don’t know what information a credit report holds. In Chapter 3 we set the record straight by listing what information is – and isn’t – in your credit file. We also explain how long the information in your credit history remains on your report and what time-frame lenders are most interested in.

A young couple are checking their credit reports online

Many Britons are aware that a poor credit score could be the reason why they’re turned down for credit. However, your credit score has much wider-reaching effects. It can quite literally affect every aspect of your life. A poor credit rating can end up costing you money on everything from utility bills to insurance. Also, it can even have an impact on your personal and professional goals. Read Chapter 7 to find out how.

If you do have a low credit rating, don’t despair. Chapter 8 is a must-read since we give some guidelines about how to improve your credit score – even after a CCJ or bankruptcy. All that is required is persistence and time. We also say whether it’s worth paying money to a credit repair agency.

The regulation of credit reference agencies

Another reason for consumers to be suspicious of credit reference agencies is that they fear that they might use the data they hold about us to make money. Are credit agencies allowed to use their credit referencing data for purposes of direct marketing?

A poor credit rating can end up costing  you money on utility bills and insurance

Chapter 4 looks at the regulation and supervision of credit reference agencies and the roles played by both the FCA and the ICO. We also explain how the work of credit reference agencies comes under the Data Protection Act of 1998 and how the GDPR will change the sector from May 2018.

Accessing, checking and correcting errors on your credit file

Easy access to your credit file is one of the cornerstones of UK and European data legislation and in Chapter 4 we tell you how to receive a copy.

Easy access to your credit file is one of the cornerstones of UK and European data legislation.

We expand on this issue in Chapter 5 by giving reasons about why it’s a good idea to regularly check your credit report and how often it should be done. We also tell you how to correct any errors you may find. We explain what a Notice of Correction and a Notice of Disassociation are and when you should add them to your credit report.

Identity theft and the safety of financial data held about you

In Chapter 6 we turn our attention to the issue of security and explain the role that credit reference agencies can play in the fight against identity theft. Although everyone has heard of credit scoring, have you ever heard of fraud scoring? We explain what National Hunter is and what steps you can take if you have been a victim of identity theft.

A woman is restoring her personal assets and information after becoming a victim of identity theft in the UK

As well as our own vulnerability to identity theft, we also consider how safe the data held by credit reference agencies is. Considering security breaches at both Experian and Equifax in the recent past, we ask: what are they doing to protect our data?

Have you been refused a financial product?

If you’ve been turned down for a financial product, Chapter 10 gives you advice about what to do next. We give you a list of do’s and don’ts so that it won’t happen to you again.

Using this 2020 guide to credit scores

This guide is aimed at any British consumer who wants to know more about credit reference agencies and credit scores. It’s essential reading for anyone planning to apply for new credit. If you’re interested to learn about one particular aspect of the topic, refer to the table of contents below.

Table of Contents:

Chapter 1: The UK’s three main credit reference agencies and how they work

Chapter 2: Your credit score, credit rating and credit history: All you need to know

Chapter 3: What information do credit reference agencies really hold about you?

Chapter 4: Credit reference agencies – Their regulation and the law

Chapter 5: Checking your credit report and correcting information

Chapter 6: Security concerns – Identity theft and the safety of your personal data

Chapter 7: How does your credit score affect every aspect of your life?

Chapter 8: A step-by-step guide to improving your credit score

Chapter 9: Some common myths about credit reference agencies and your credit rating

Chapter 10: What steps to take if you’ve been refused a financial product

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