DFH Financial Solutions

Credit Reports, Are They Worth Checking Out?

Credit Reports & Why They Are Important

Have you ever wondered how a bank or lender decides whether or not to give you credit?

One of the tools a creditor uses is your credit report/file. This tells them about your credit history and helps them assess how much of a risk lending to you will be.

In the UK there are three main credit reference agencies (CRA) that compile information on how well you manage credit and make your payments. They are Equifax, Experian and CallCredit.

These companies also offer free access to your credit report during special offers and some even offer free access for life!

Why is it important to check your credit report?

Checking your credit report with all three CRA’s will allow you to identify any fraudulent activity and ensure the information recorded is accurate.
By checking your credit report, you will also be able to determine how likely it is that a company will lend you credit and you can also get tips on how to improve it from the CRA.
Why is my credit score different with each CRA?

Hopefully one day the CRA’s will use a standardised reporting style but until then they differ due to:

1. Lenders can choose who they report to and not all lenders report to the same lender, here is a % of lenders who use these different credit reference agencies*

  • Credit reference agency Equifax,also known as Clearscore – 55%
  • Experian also known as CreditExpert  – 77%
  • Callcredit also known as Noddle  – 32%

* Correct as of 04/10/2018.

2. Each CRA also has a different style of reporting:

Equifax

  • Very Poor – 0-279
  • Poor – 280-379
  • Fair – 380-419
  • Good – 420-465
  • Excellent – 466-700

Experian

  • Very Poor – 0-560
  • Poor – 561-720
  • Fair – 721-880
  • Good – 881-960
  • Excellent – 961-999

Callcredit

  • Very Poor – 1
  • Poor – 2
  • Fair – 3
  • Good – 4
  • Excellent – 5

How often is my credit report updated by my creditors?

Creditors are expected to make a monthly report to the CRA’s.

How can I improve my credit score?

In order to improve your credit score we recommend:

  • Making all payments on time and in full; including utility payments and mobile phone bills.
  • Avoid opening new credit accounts if possible as this will also decrease a credit score.
  • Once you have repaid your outstanding debts and want to responsibly use credit again try not to make multiple applications for credit.

How long will a credit agreement stay on my credit report?

A credit agreement is removed from the credit report either six years after it has been paid off or six years after the date a default is reported on the credit report.

I was advised by my friend that there are companies who will help me to rebuild my credit score. Is this true?

You can use a credit repair company to remove incorrect entries but this can cost you money! Alternatively, we would suggest checking that there are no incorrect entries on your credit report and if there are have these incorrect entries get these removed by contacting the company. Other than this, rebuilding a credit report takes time and responsible use of credit.

I am going to be applying for a mortgage is there anything I can do to improve my credit score?

It is recommended that you get a copy of your credit report and check the accuracy of all of the entries on it. If you are not on the Electoral Register you should register at www.gov.uk/register-to-vote . Also, you should choose a mortgage provider and not make multiple mortgage applications as this will reduce your credit score.

Can I take my ex-partner off my credit report?

Any financial associates that you have can be removed if you have no longer have an active joint account or mortgage with the financial associate. The account must be paid in full and closed. To remove the financial associate, contact the CRA concerned and they will be able to assist you in removing it.

What can be reported on my credit file?

  • Mortgages.
  •  Credit Cards.
  •  Loans.
  •  Mobile phone contracts.
  •  Store cards.
  •  Home/Online shopping accounts.
  •  Catalogue accounts.
  •  Debt collectors.
  •  Vehicle finance.
  •  Utility bills- Water, Electricity and Gas.
  • Rental payments.
DFH Financial Solutions offer advice on debt solutions tailored to your individual circumstances. These include IVA, Debt Management Plans. If you are worried about debt, contact one of our trained debt advisor's today.

The Money Advice Service and your local Citizens Advice Bureau offer free independent debt advice.

Call us on 0800 881 8722

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