How do lenders use my credit report to assess me for credit?

Most lenders search one credit reference agency and a minority of lenders search two. Most search your current address, or, like us, your current and previous address. Because each credit reference agency has different customers, your credit report will be slightly different, depending on which credit reference agency is searched.

Most credit decisions are made using credit scoring. Credit scoring is a much fairer way of assessing credit, because it is unbiased and treats everyone in the same way. Tests have shown that credit scorecards can assess credit applications much better than human judgement can. They also take account of the fact that credit reports vary from different agencies, and will have different levels of information. If you wish to see your credit score, you have an option to purchase it on annualcreditreport.co.uk for just £3.77

Your payment history – usually shows credit card and store card accounts, any loans you may have, mobile phone accounts and some bank accounts which are reported about you every month to the credit reference agency.

The electoral roll, court information, insolvency records, gone away warnings and fraud warnings are all taken from the same sources, so the mainstay of your credit report will usually be identical, no matter which one of the three credit reference agencies is used. The only difference is in the searches section – each credit reference agency only reports those searches that are made of it. Also, in the payment history section of your credit report, only about 200 lenders share payment history information, so most companies will see the same report. Many lenders share your information with more than one credit reference agency, so, even though different accounts may be reported on your credit reports, there’s little difference in your credit rating, no matter which credit reference agency is used. Each of the three credit reference agencies usually has enough information about you for a lender to make a well informed decision.

This means that, at first glance, some of your credit account information may appear to be missing from your report, but, be assured, your credit report is complete.

click here to go back