credit report UK

When borrowing money from a lender, the lenders customarily check the financial details of the borrower with their selected credit reference agency and see if the borrower is a good or bad credit risk. In the UK there are three main credit reference agencies from where a person’s credit information can be collected. The three main agencies for acquiring the credit report in the UK are;
1. Equifax,
2. Experian
3. Callcredit

Most of the companies that lend money or provide a credit service usually check with two credit reference agencies, of which Equifax and Experian are used more often. Callcredit is fairly new in the business, but provides the same service. The credit reports in the UK are basically not well understood with the general public and the severity of its affect when applying for a loan. The information that these agencies use contain information from two main sources:
1. The Public Record: e.g. electoral roll data, court judgments, individual voluntary arrangements and bankruptcies.
2. The information that lenders and financial institutions provide: e.g. credit accounts, credit applications and financial links.

The credit reports in the UK hold all sorts of data helpful in analyzing the ability of your repayment. The number of application that has been applied by the borrower can be seen in the report, so multiple applications over a small period are seen as a suspicious borrower. Having a number of credit cards, or dormant account is also seen upon suspiciously by potential lenders.

An important point to note is that the credit reference agency plays no role in the decision of the lenders and has no clue of the outcome. So when applying for a loan or any sort of financial help, the calculations are made on the basis of the information in the credit report and the calculation method varies from each lender. Them declining the application is based own their own decisive factor. However by law, the borrower has to know why his application has been rejected.

When applying for a loan, the borrower has every right to know which credit reference agency is being used. Also the credit search cannot be done without your conformity so when making an application it is important to ask for a quotation. The quotation does not always imply a search of records, if that is the case though it will be seen as a quotation search on the credit report and does not affect the borrower’s credit rating in the future.