Credit Reports, Credit Files, and Credit Blacklists
Your Rights
Under the Data Protection Act, you should be informed that your credit history is going to be researched when you apply for credit. In most cases, you should also be informed should a credit reference agency receive information about you from a lender. They should let you know who they are, as well as how your data will be used and disclosed. In order to make the process easier, what typically happens is that the lender tells you about all of these things when you apply for credit. The name and address of the agency that is being used will be made available to you if you ask for it. You can write to the lender to get this number, or retrieve it via phone. You have the right to retrieve a copy of your credit reference file directly from the credit reference agency.
Are your Credit Blacklisted?
There is actually no such thing as a credit blacklist. Only factual data can be displayed about people. Lenders provide most of this data. The credit agency does not offer an opinion as to whether you are credit worthy or not. Companies make their own decisions using credit scoring which is based on data held by credit reference agencies, info you have provided them with, plus their own internal processes. Most credit reference agencies hold data that shows most people are good payers and have made their repayments on time.
Your Right To See Your Credit File
It is not necessary to have been refused credit in order to see what data credit reference agencies hold about you. You can ask at any time for a copy of your file in writing. The fee for this is around two pounds. If you run a business as a sole trader, you should provide its name and address, as well; under the data protection act, you will be entitled to any separate information that is held about you in a business capacity.
In the event that you are in a business partnership, you can also ask for a copy of your file, since this information is guaranteed to you under the Consumer Credit Act. You have a right to this information as regulated by the Office of Fair Trading. Requests for advice on credit related to partnerships should thus be sent to the Director General of Fair Trading. Limited companies do not have such rights.
You should keep any letters you write, as well as proof of posting. These can be useful should a disagreement arise concerning your file.
It may be necessary for the company you contact to ask you for more details in order to get all the information they hold about you. Otherwise, they should send your file out within seven business days of receipt of your letter, or inform you that they have no information about you.
The main UK Credit Agencies:
- Equifax Plc
Credit File Advice Centre
PO Box 1140
Bradford
BD1 5US
www.equifax.co.uk
(You can order your credit file on the internet or by telephone). - Experian Limited (tel: 0870 241 6212)
Talbot House
Talbot Street
Nottingham
NG1 5HF
United Kingdom
www.uk.experian.com - Callcredit plc (tel 0870 060 1414)
Consumer Services Team
P O Box 491
Leeds
LS1 5XX
www.callcredit.plc.uk
You can use this sample letter to find out which credit agency your lender is using.
123 Your Street, Your Town, Your Post Code |
Dear Loan Company |
Here is a sample letter that requests your credit report.
123 Your Street, |
Dear Credit Reference Agency |
In such letters, the following data should be included:
- Your full name, including title, forename, middle name and surname (and maiden name if appropriate)
- Any other name you have been known by
- Your date of birth
- Your current address, including house number/name, street name, district, post town and postcode
- Any previous addresses lived at during the last 6 years. List each address separately including house number/name, street name, district, post town and postcode
- Your signature
You may not request anyone else’s credit report other than your own.
Correcting Errors:
See Correction Credit Reports
Credit Score
What is inside your credit report define your credit score.
What is a credit score?
This is what lenders use to calculate whether they will grant you a loan or credit. Such a score presents a snapshot of your risk picture at a given point in time. The higher your score is, the lower the risk is to the lender.
How are credit scores calculated?
Every score is individual and calculated using a mathematical formula that evaluates all types of information on your credit report, compared to information patterns in millions of past credit files. The score can then identify your level of future credit risk.
Important factors in credit scores
Most credit score and credit rating agencies use five main factors to determine your credit score. Listed in priority order, these are:
- Payment History,
- Amount owed,
- Length of credit history,
- New credit,
- Types of credit in use.
These will vary between credit rating agencies but the essentials will remain the same.
Why do lenders use scores?
Scores provide a reliable guide to future risk based on credit report data. The higher your score, the lower the risk to lenders when extending new credit. Debt Consolidation Loans often require a good credit score, so do not wait until you have missed lots of payments to ask for help. Banks are far less keen on lending money to repay other people's debts than they are for a tangible item such as a car or household appliances.
Does everyone have a credit score?
No, but anyone who has had credit will have a credit file. For a score to be calculated on your credit report, the report must contain at least one account that has been active for six months or longer. In addition, the report must contain at least one account that has been updated in the past six months. This ensures that there is enough recent information in your report to compute an accurate score. Your score also will not be calculated if there is a fraud statement on your credit file.
How often does the score change?
Your credit file is continually updated with new information from your creditors and the companies that supply you with credit.
An advisor will phone you for a free consultation.
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