Credit ReportWe’ve all been there – biting our nails whilst the nice lady in the bank leaves the room to go and check just how credit worthy we actually are.

Just how do they check, how do they score and what can they find ?

What is a credit check?

When you apply for a loan, credit card, store card or mortgage, the lender will conduct a credit check before approving your application. To define, a credit check is the process of judging the creditworthiness of the borrower by reviewing his credit repayment history. The lender basically examines the borrower’s capability to abide to their financial responsibilities. A credit check gives assurance to the creditor that the lender will repay his loan regularly.

What things are taken into account while performing a credit check?

While performing a credit check, the lender will give you points on the following details.

  • Your employment status
  • Number of years you have lived in your current house
  • Your credit card details
  • Your income details
  • Other loans you have availed
  • Your repayment record
  • Number of arrears, defaults and missed payments you had
  • If you have any CCJ registered against you
  • Have you ever been declared a bankruptcy

After evaluating all this, the lender will make your credit report, mentioning your credit score according to his parameters.

The lender will not ask you for all the information required, nor will they usually research themselves – they will turn to the services of a credit reference agency who will hold all you financial history on a central database ….. scarey isn’t it !!!

There are three main credit reference agencies in the UK:




This information is NOT private – YOU are entitled to see your report and check the information held.

County court judgments will automatically be registered and are kept on record for period of six years. The information a credit reference agency hold about you is known as your credit report (or file).Credit reference agencies hold information about your credit agreements (including any arrears), county court judgments (CCJs) and electoral roll information. A lender can only pass on information about your credit agreements with your consent. You usually give this consent when you sign the credit agreement. Failure to obtain your consent is a breach of the Data Protection Act 1998.


Credit reference agencies provide factual information with your consent, so that a company can make a decision about whether to lend you money. They do not have a ‘blacklist’ of people who should not be given credit.

Credit Scoring

When being considered for credit, a lender may also take into account factors such as your age, occupation and whether you are a homeowner, (the information you give them on your credit application). Lenders often assess this information and the information on your credit report using a process known as credit scoring (see below). They will also take into account whether you are on the electoral register. This may be an important part of the lender deciding whether to give you credit.


You can apply to go on the electoral register at any time of the year. Contact your local council for further assistance. You should make sure you fill in the electoral registration form sent out in September or contact your local council if you move at any time in the year.

The lender may give points to each piece of information it has and then add them up to give you a credit score. If you do not score above the particular company’s pass level then you may well be turned down. The score might take into account the information on your credit report. Each lender has their own policy guidelines that they follow when making lending decisions.

Every time you apply for credit a ‘search’ by the lender is marked on your credit report. Searches stay on your file for different times depending upon which credit reference agency was used. Experian holds search entries for 12 months, Equifax and Callcredit for up to 24 months.

Ask the lender if they are using a credit score to decide whether to give you credit. If the company uses a computerised system you should be given broad information about how credit scoring works and the type of things they have taken into account in the scoring system for that company. If you are turned down they should tell you if you didn’t pass. They should also tell you if you were turned down for any other reason, for example, because of the information held on your credit report.

More Information

If the decision was made solely using a computerised scoring system you can ask the lender to look at your application again. This review should be done manually and not using an automated system. You may have to supply extra information to support your application.

If you are refused credit you should ask the lender which credit reference agency they used and request a copy of your report from that agency.

If you have been refused credit, then you should ask the lender which credit reference agency was consulted and whether the credit reference agency’s information was the reason for the decision. You can contact this agency and ask for a copy of your credit report under the Data Protection Act 1998. At the time of writing this costs £2 by letter or over the internet and £3.50 by telephone from Experian. The agency will require your full name, current address, date of birth and any previous addresses that you have lived at for the past six years. Your report should be sent to you within seven working days unless the agency needs you to send proof of your identity, for example, if you have moved home recently. If the information is incorrect then you have a right to ask the agency to remove or correct the information.

You should check information held by all of the three main credit reference agencies, Experian, Equifax and Callcredit plc as some information may be different.