Money 101: Credit Reports

Have you ever wondered how banks and building societies, (often called “lenders”) decide whether or not to give you an overdraft, credit card or loan? While each lender will have their own assessment criteria when you apply to borrow money, one of the tools they use to help make their decision is your personal credit report.

Think of this as your financial CV; it tells a lender how responsible you have been with money you have borrowed in the past, how often you apply to try and borrow money, as well as personal details such as registered addresses and whether or not you’re on the electoral role. The personal details in your credit report can be used to try and verify you electronically – to make sure you are who you say you are.

Lenders will use all of this information to assess how risky it is to lend you money, and help them decide whether or not to lend to you. If you haven’t always managed your credit well or don’t have a good credit rating, you may be offered a higher rate of interest (making borrowing more expensive) or smaller amount of credit due to the higher risk.

Who compiles credit reports?

In the UK, companies called credit reference agencies (CRA’s) compile information on how well you manage credit and use this to create your credit report. There are three main CRA’s in the UK;

  • Experian
  • Equifax; and
  • TransUnion

Each of them hold their own file on you which is your credit report (or credit file), and the information can often differ between them.

What is in your credit report?

Your credit report typically holds the following information;

  • Your past borrowing; this includes current accounts with overdraft facilities as well as any credit cards or loans. If these are still active accounts, it will include a recent account balance. Your report will also show if you have made your repayments on time – missed or late payments (often known as black marks) will show on your credit report for at least six years.
  • Financial links; this includes details of anyone you may have taken out joint borrowing with previously, such as a joint credit card or loan.
  • Public record information; such as County Court Judgements, house repossessions and bankruptcies. Like missed or late payments, these stay on your report for at least six years.
  • Personal information; this includes your name and date of birth as well as whether or not you are on the electoral roll.

What is a credit score?

A credit score, or credit rating, is a score assigned to you by a CRA based on its own criteria. It’s possible your credit score can differ between the three CRA’s, so it’s important to remember this is just an indication based on the information they hold and isn’t a guarantee you’ll be able to borrow money.

How to check your credit report

It’s important to check your credit report regularly to ensure the information held in it is accurate. CRA’s are required to give you a copy of your credit report for free, and you can access the report online or by asking for a written copy.

As your credit report can differ with each CRA, it’s worth getting a copy for your credit report from all three main CRA’s if you have not checked it for quite some time.

If you would like more information on credit reports, how they are used, and how to get a copy of yours, visit;