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An Introduction to Credit Reports

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Written by: Rory

Published May 30, 2020

What is a credit report?

A credit report is a detailed compilation of an individual person's credit history, as compiled by one or more of the United Kingdom's three Credit Reference Agencies (CRAs). CRAs take into consideration all of your previous credit behaviour; including how you have managed your previous credit accounts, the number of accounts you have created and the manner in which you re-paid the credit you owed.

Prospective lenders then use these reports as a tool to help decide whether to extend an individual credit, and on what terms. In simple words, your credit report tells the story of how you have handled credit in the past. Based on this story, lenders will then make a prediction on how trustworthy you will be going forward

What is the difference between a credit report and a credit score?

A credit report is a detailed breakdown of your credit behaviour covering a six-year period. A credit score is a summary of that report, into a numeric score.

A credit score can be thought of as a number that represents your financial health. However, you do not have just one credit score. In the UK, there are three different Credit Reference Agencies (CRAs) – Experian, Equifax and TransUnion. Each one, has a different scale and set of rules when calculating your score.

To find out more read our credit scores guide.

What does a credit report show?

A credit report is a detailed document. It contains information about you, your current financial accounts, payment history and other key information.

Accounts & Payments History

Your credit file will normally contain detail on your:

  • Current accounts
  • Credit cards
  • Mobile phone contracts
  • Personal loans
  • Car finance
  • Mortgages
  • Utilities
  • Other financial products

For each account the report will show the current balance, date of opening, payment history (including missed payments) and credit limit.

Personal Information

Identifying information as date of birth, name, home address and electoral roll registration.

Any public record information attached to your name. This includes notices of bankruptcy, appearances in court, County Court Judgements (CCJs), or evidence of debt – overdue or not. These exist on your report for at least six years.

Details of any people you are financially associated with, for example, because you've taken out joint credit.

Notices of correction

This is a note you've asked a credit reference agency to attach to your credit file to explain a default or issue. This note will not be more than two hundred words.

Who looks at credit reports?

According to Experian, companies that may look at your report include:

  • Banks
  • Mortgage providers
  • Creditors and lenders
  • Potential employers (however you have the right to refuse)
  • Utility and service companies (such as gas, water and electricity providers)
  • Insurance companies
  • Government agencies
  • Debt collection agencies
  • Letting agents and landlords
  • Mobile phone companies
  • Price comparison sites

In order to access your data (which is also known as running a 'search'), a company will need your permission. This permission is typically granted as part of an application process.

How do I view my credit report?

You can access reports from each of the three Credit Reference Agencies (CRAs) through the following services:

How often should I check my credit report?

Once you subscribed, we recommend you check your credit reports once a month to check for changes.

Remember, each agency compiles your credit score and credit report independently, so it's worth checking all 3 for a complete overview.

How can I improve my credit report?

Here are some helpful tips to improve your credit file:

  1. Register on the electoral roll. This will allow lenders to confirm that you live at the address you provided in your application. You can register for free, anytime, here.
  2. Avoid late payments. Missed or late payments can stay on your credit file for up to six years. A simple tip is creating a direct debit to avoid making payments.
  3. Reduce the number of hard searches. Each time you apply for credit, a credit search of your name is made by a lender. This leaves a footprint on your credit file. A high number of these over a short period of time is not good.
  4. Review financial associates. Once your finances are no longer linked to another person, contact each CRA and ask for a notice of dissociation.
  5. Review the accuracy of your credit file. Ensure all the accounts listed on your credit file are correct and belong to you.

What is a soft search and what is a hard search?

When any third party such as a price comparison website, or a bank asks for access to your credit file, it triggers a 'search'. There are 2 types of credit searches.

Soft search

A soft search does not affect your credit history and only you will be able to see who has performed this search. Soft searches are typically triggered by:

  • You checking your own credit report
  • Identity checks
  • A lender or price comparison website checking your eligibility for a new product

Hard search

A hard search is different and leaves behind a footprint, which can be seen by other lenders. Typically, this will occur when you apply for a loan, credit card, mortgage, utility account or some form of credit.

A hard search may have an impact on your credit score, although this will be temporary so long as you keep up with your payments. These searches will typically show on your report for 12 months.

You should avoid running unnecessary hard searches, as having a number of hard checks in quick succession may make you look riskier to lenders.

How do lenders use the data from my credit report?

Lenders use the information available in your credit report, and the credit score calculated by the CRA, to assess your financial behaviour and determine your creditworthiness.

Each lender will have their own unique criteria on who they will and will not consider a good candidate for credit. They will look at a large number of datapoints from your credit file, alongside the information you have directly provided to them, to judge what credit risk you are.

There is no universal scale for a lender's appetite for risk. For example, lender A may choose not to lend to anyone who has made a late payment within the last 2 years. Whereas lender B may allow one late payment in a six-month period, provided the customer is no longer in arrears.

You can check the credit score that each Credit Reference Agency has given you for an indication of how lenders may view your financial health. To understand more about credit scores and see how to check your own score, click here.