Credit Ratings FAQs
These are some of the most frequent questions about
consumer credit files and the role of credit reference agencies.
What is a Credit Reference Agency?
These are companies that collect and profile data about individuals for the
purposes of providing this information to other companies that grant credit. The
information collected by agencies comes from sources including lenders themselves who
share data. The largest UK credit reference agencies have files on most adults in the
United Kingdom. The credit reference agencies compile the data and the result can be used
to give an indication of an individuals credit status.
What is shown
on a personal credit report?
A credit report can show if you are listed on the Voters
Roll and any previous or linked addresses you have lived at, and whether any county court
judgments (CCJs) have been registered against you. The records generally go back a period
of six years. Anything older than this tends to be removed, so if you have had problems on
your file you effectively get a clean start once that information is removed after this.
How quickly you pay any existing loans, or credit cards may be shown, and mortgage
payments can also be revealed. If you have run a business as sole trader or partnership
(not as a Limited company) these records my be included too.
Who uses the credit
reference agencies?
Most major banks, mortgage lenders, finance companies, credit and store cards, phone
companies, and utility companies. When a person makes a credit application with them
lenders can look at the information that has been compiled about the applicant and decide
if they represent a good credit risk.
I've been
refused credit what should I do?
A credit agency can not tell you why you have been refused, you need to ask the company
that refused you. However the company must tell you if they used a credit agency, and can
give you an idea of any problem or concerns they have. You can then ask the credit agency
for a copy of your credit file if you feel that information on your file contributed to
you being refused credit. You can correct any errors on your file, and you can make a
statement on your file if you wish to explain any circumstances surrounding information on
your file.
Is there a 'credit blacklist'?
No, credit reference agencies do not have 'black lists'. Each agency keep records which
are provided to them by lenders, credit card companies, building societies, banks and
other lenders, and some telecommunications and utility companies. These records show how
promptly people pay their accounts, and whether they miss payments or get into arrears.
Who decides if I am
a good credit risk?
The lenders have their own criteria. The credit agency does not tell them whether you are
credit worthy, but provides the information and in some cases a credit score. The lender
decides what credit score is satisfactory for them to grant credit.
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