CREDIT REFERENCE AGENCY

Why do lenders use credit reference agencies, and what information do they have on your credit file?

Credit reference agencies hold information on most adults in the UK. This helps lenders to make lending decisions with a minimum of risk. It also helps to reduce the risk of fraud.

They have information which is Public record information, such as the electoral roll (used for checking names and addresses), county court judgements (CCJs) and Scottish decrees (awarded against people who have defaulted on debts), and records of bankruptcies, individual voluntary arrangements and administration or repossession orders.

They also have Credit account information – as other lenders share information about borrowers by registering it with credit reference agencies. This can show whether people have kept their payments up-to-date in the past. It also lets them check whether people have loans outstanding with other lenders and, if so, whether they have kept the payments up to date.

They share Search information – this shows the number of credit checks carried out by other lenders. A large number of applications made over a short period of time, could be seen as an indication of over-commitment, or even fraud.