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Credit Ratings And Reports

Here we explain the roles credit reference agencies play and the information lenders use when processing a credit application.

What are Credit Reference Agencies?

Credit reference agencies are companies who collect information about people from a number of sources, including data in the public domain such as the electoral roll, public insolvency register as well as information provided by lenders.

So, you do not have a single credit report nor a universal credit score – but one from each agency.

 credit reference agencies

The main credit reference agencies in the UK are Equifax, Experian, and Callcredit.

Credit reference agencies do not themselves make any decisions about credit applications – they simply provide information to lenders who can act on this information as they see fit.

To determine risk, lenders need a comprehensive understanding of your suitability to receive credit and they build this from:

  • What they already know about you if you’ve have previously had dealings with that lender/business, for example if you’ve always made payments on time.
  • Information included in an application for credit.
  • Information about your circumstances and past financial behaviour that is held by credit reference agencies.

How do I see one of my credit reports?

You can view a credit report online via the websites of the credit reference agencies. Typically the data in the report updates monthly; you’re allowed a single free report but then must pay a monthly subscription to continue to see up to date information.

Free-Forever Credit Reports
CreditKarma and Clearscore provide an always free credit report service – the only catch is they push adverts for loans and credit card at it’s users. Clearscore use data from Equifax, while Noddle is part of, and uses data from Callcredit.

These services are surprisingly easy to set-up, allowing you to view the information held about you immediately. offers a service allowing you to view all 3 credit reports on a free trial and then a monthly fee.

How Credit Scoring Works

Lenders have their own internal scoring system to help them decide whether to offer credit based on whatever their own lending rules are.

Details provided with the applications, plus historic information if you’re already a customer are converted into a points system.  The lender will normally combine this information with data from one of the credit reference agencies. This is not necessarily just data personal to you – but may included information about your post code to help build a profile.

This overall score determines if you are to be offered credit and if so – the terms and interest.

Your Postcode – Where You Live Can Matter
Credit reference agencies give each postcode its own score based on the risk of bad debts. Data comes from sources such as credit files, county court judgments and bankruptcy orders. Lenders use postcode data in different ways although some not at all.

As you are unable to judge what criteria are used on a lender’s internal scoring system, it is always a good idea to be able to view a version of your credit report.

These come with a rating grade or use their own numerical scoring system – which is a good indication of how safe a bet you currently are to any lender.

Further reading : Understanding Your Credit Report