Credit reference agencies are key players in our financial system. These companies collect and store information about people and businesses in a safe way. Only businesses with a good reason can see the information held by these reference agencies.
What is a Credit Reference Agency?
Credit reference agencies gather facts about your credit history. They store this in your credit file. They share this with lenders when you make a credit application. Having all these facts in one place helps in two ways:
- It makes lending choices faster
- It helps stop fraudulent applications
What do Credit Reference Agencies do?
Credit reference agencies collect facts from many sources. They use these to build your credit reference file. They don’t give views on what kind of borrower you are. They only work with facts from:
- Banks
- Credit card companies
- Loan companies
- Utilities providers
- Any credit taken such as Mobile Phone and retail finance
- Public records
Your credit report has details that help companies know who you are. This helps stop fraud. It also shows your credit history. Lenders can see how well you’ve paid debts in the past. This helps them decide if they should lend to you or if you might be refused credit.
Credit reference agencies use your credit report to work out your credit score. This number shows how well you handle money. The higher your score, the easier it is to get a loan or credit agreement.
How many Credit Reference Agencies are there in the UK?
The UK has three main credit reference agencies. Each works on its own. This means you need to check your credit report with all three. This way you can see what’s being said about you.
The three main credit reference agencies in the UK are:
- Experian
- Equifax
- TransUnion (once called Callcredit)
Companies in Northern Ireland and across the UK use these same reference agencies.
How does a Credit Reference Agency collect information?
Credit reference agencies gather their facts by:
- Getting updates from banks about your accounts
- Adding public facts about you, like County Court Judgments
- Adding if you’re on the electoral roll
- Getting data that is updated monthly from various companies
How do Credit Reference Agencies use this information?
Credit reference agencies use the facts they collect to make your credit report. They use this to work out your credit score. Your credit score is a number that shows if you’re good with money. It’s a quick way to see how well you handle your finances.
Not just anyone can see the facts on your credit report. The credit reference agencies keep it safe. Only companies that have your OK can see it. For instance, when you make a credit application, the lender will check your credit report.
What information is included in a credit report?
1. Basic personal information
This includes:
- Your name
- Your birth date
- Your current address and previous addresses
- Your contact details
2. If you’re registered on the electoral roll
Being on the electoral roll is public. Credit reference agencies add this electoral roll information to your credit report. It helps lenders confirm who you are.
3. All your credit accounts
Any financial accounts you have will show on your credit report. This means bank accounts, loans, and other credit agreements. It also shows how well you manage these accounts. If you’ve got a default notice, this will appear too.
4. Public records
Facts about you from public files can appear on your credit file. This includes if you’re bankrupt. It also shows Individual Voluntary Arrangements (IVAs), administration orders, or County Court Judgments. The Registry Trust gives facts about court judgments to credit reference agencies.
5. People who you’re financially linked to
When you open a joint bank account with someone, that person appears on your credit file. This means if you apply for credit just in your name, the lender might look at that other person’s credit file too. If you split with an ex-partner, you may want to break these financial links.
How can I get my free annual credit report?
You can get a free credit report in two main ways:
1. You can get a free credit report direct from the Credit Reference Agencies
The Consumer Credit Act says credit reference agencies must give you a copy of your own credit report once a year. You can get yours by setting up an account with them. They’ll let you view your credit report online, by email, or by post.
2. You can get a credit report from a credit checking service
Credit checking services will show you your credit report if you sign up with them. Some popular credit checking services are:
- Money Saving Expert’s Creditclub
- Clearscore (shows your Equifax report)
- Credit Karma
When you check your own credit report, it doesn’t hurt your credit score. You can look at your Equifax credit report, TransUnion data, or Experian information as often as you like.
Why is my credit score different with each of the Credit Reference Agencies?
When you check your credit score with different agencies, you may be surprised. The number isn’t the same with all three. There are two reasons why your credit score differs:
1. Each Credit Reference Agency uses different credit scoring ranges
The three main credit reference agencies in the UK don’t score in the same way. Each has its own scoring system. So your credit score won’t be the same with all three. For example, your Equifax credit score will be different from your Experian score. Here’s how their credit scoring ranges differ:
| Credit Score Range | Very Poor/Poor | Fair | Good/Very Good | Excellent |
| Experian | 0-720 | 721-880 | 881-960 | 961-999 |
| Equifax | 0-438 | 439-530 | 531-810 | 811-1,000 |
| TransUnion | 0-565 | 566-603 | 604-627 | 628-710 |
As you can see, a score of 650 would be great with TransUnion. But with Experian, the same score would be poor. The Equifax credit score uses yet another range.
2. The Credit Reference Agencies may not have the same information
Though lenders should tell all three agencies about your accounts, not all do this. This means the information may vary between credit reference agencies. So, the facts one agency uses to work out your credit score won’t be the same as another.
Remember, your credit score can change. If your credit score is low with one of the credit reference agencies, you can take steps to boost it.
How can Credit Reference Agencies help you improve your credit score?
Credit reference agencies can help you boost your credit score in many ways. You’ll need to sign up with them to use all their services. They’ll charge a fee. But they all offer a 30-day free trial so you can try first.
They can help by:
- Giving tips to improve your credit score based on your credit report
- Helping you understand your financial situation better
- Updating your credit score when new information is added to your credit report
- Alerting you if information on your credit report changes
- Showing all your accounts in one place to help you track your debts
- Helping you understand your financial details
What are the benefits of using a Credit Reference Agency in the UK?
The main benefit of using a credit reference agency is they give trusted credit history information. This helps lenders make quick choices. It also gives them information they can trust. This helps stop fraudulent applications.
Credit reference agencies help you by giving you one place to see all your financial accounts. This helps you stay on top of your finances and manage them well. You can check your own credit report often to make sure it’s right.
Are there any drawbacks of using a Credit Reference Agency?
The main drawback of using a credit reference agency relates to your credit report. Since they may not all have the same information, you can’t trust just one agency. You need to check your credit report with all three. This way you can see what’s being said about you. This is also why your credit score is different with each agency.
Another drawback is that credit reference agencies can’t tell you if you’ll get a loan. They don’t make credit decisions. This is because:
- Lenders each have their own rules for deciding whether to give you a loan.
- Lenders don’t just use your credit report. They also look at things like your income and job. If you’ve been refused credit, you may reach out to the lender if they can provide a reason about why they rejected your application.
What are the different types of Credit Reference Agencies in UK?
1. Experian
Experian is a top credit reference agency in the UK. They’ve been around for over 125 years. They’ve made ways to help boost your credit score. Their tool called Experian Boost can raise your Experian credit score by up to 101 points.
2. Equifax
Like Experian, Equifax is one of the top three credit reference agencies in the UK. They formed over 120 years ago. They collect facts on people and companies to create credit files. Equifax was the first agency in the UK to give people online access to their Equifax credit report.
3. TransUnion
TransUnion took over Callcredit. Now they’re one of the top three credit reference agencies in the UK. They launched their open banking platform in 2019. This helps lenders make lending choices. Many companies use open banking to help assess credit applications.
4. Clearscore
Clearscore is a credit checking service. It’s not a credit reference agency. They claim their credit score app is the best in the UK. You can use Clearscore to view your Equifax report. But it’s based on information held with Equifax.
5. Credit Karma
Credit Karma is another credit checking service. You can get your credit report from them. But it will be based on information held with TransUnion.
6. Callcredit
Callcredit was bought by TransUnion in 2018. You can no longer get your credit report from Callcredit. You’d need to go to TransUnion instead.
There’s also a company called Credit Safe. They aren’t a credit reference agency. But they help companies check credit reports for other companies they deal with. They also help companies understand their own credit rating.
How to choose the right Credit Reference Agency for your needs?
If you want to know which credit reference agency to choose, ask the lender. Ask which one they use. Though lenders should tell all three, some don’t. This means the information each agency holds about you isn’t always the same.
The best way to manage your finances is to often check what’s being told to all three agencies. That way, if there’s a mistake, you can fix it. You can do this before it hurts your credit score. Some people check their Equifax credit report one month. Then they check their Experian record the next. Then TransUnion after that.
If you find other addresses or accounts you don’t know on your credit report, contact the right agency at once.
Can a Credit Reference Agency make a lending decision?
No, a credit reference agency can’t make lending decisions. These are always made by the lender. A credit reference agency can only give the information to help a lender make their decision.
What different types of services are offered by Credit Reference Agencies?
Credit reference agencies offer more than just credit files on people and companies. They provide other services such as:
1. Credit risk and affordability
They give lenders tools to help with lending choices. The credit reference agencies offer services to help lenders. These help them decide if people can afford loans.
2. Fraud protection
Credit reference agencies help stop fraud. They do this by letting companies check people’s IDs. They also help stop fraudulent activity in the financial system.
3. Government checks
Some government bodies might use credit reference agencies. They might do this to help check if people should get benefits. The government might also use them when trying to collect unpaid taxes.
Final thoughts
Credit reference agencies play a big role in the UK’s financial system. They collect financial information about people and companies. They give a trusted source for companies to use. This includes lenders who rely on credit files to make lending decisions. It means they can approve loans faster. It also helps stop fraudulent applications.
We have three main credit reference agencies in the UK. They are Equifax, Experian, and TransUnion. It’s worth checking your own credit report and credit score with all of them. This is because the information might not be the same with all three.
Credit reference agencies can be trusted to inform and support us. They help keep our finances safe. If there’s a worry, you should contact the lender first about the information on your credit file. If there is an issue or wrong entry that the lender refuses to correct, then you can even go to the FOS.
Disclaimer: The above content is for reference only. Please visit the main website of each credit reference agency for more information. The external links here are only for reference. We are not linked with any of these outside parties.
