Credit Basics

• What is a credit report?
• What's on my credit report?
• How does my credit report affect me?
• How can I make changes to my credit report?
• What to do if you've been refused credit?
• Are you on a credit blacklist?
• What is credit monitoring?
• What are file alerts?
• What is identity fraud?
• How to avoid identity fraud

What is a credit report?

Your credit report is compiled by credit reference agencies using information from two main sources:

• The Public Record: e.g. electoral roll information, court judgments, individual voluntary arrangements and bankruptcies
• Information provided by lenders and financial institutions: e.g. credit accounts, credit applications and financial associations

The contents of your personal credit report can have a bearing on whether or not you are given credit. Factors other than the information held on a credit report may contribute to a lending decision as well (such as the information you provide on your application form), but your credit report is important.

You have the right to view the information contained in your credit report to make sure it is accurate. If errors are found, you are entitled to apply to have them corrected.

Having the ability to view and challenge your credit report is important. In addition to providing the basis for a lending decision, your credit rating may also affect the interest rate you are offered by lenders, which could lead to more costly borrowing.

To view your personal credit information that lenders are currently basing their credit decisions on, apply online for a credit report from Experian, the UK's largest credit reference agency, now. You will also receive a 30-day free trial to the CreditExpert Monitoring Service from Experian.

Click here for a free 30-day trial and a free copy of your Experian credit report

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What's on my credit report?

Your credit report is compiled by credit reference agencies using information from two main sources:

• The Public Record: e.g. electoral roll information, court judgments, individual voluntary arrangements and bankruptcies.
• Information provided by lenders and financial institutions: e.g. credit accounts, credit applications and financial associations.

Click here for a free copy of your Experian credit report

The Public Record

On your credit report, electoral roll entries will show the name of your local authority, the address the local authority holds for you, the names of the people registered to vote at that address and the dates those people were registered.

Lenders use the electoral roll to check the identity of the people applying for credit and to make sure the addresses provided on application forms are correct.

The electoral roll is published each December using information the public has supplied to local authorities. Credit reference agencies update their records every year, but if you move home you can tell your local authority who will tell them about your change of registration in the course of the year.

Court judgments are held on your credit report for six years from the date of the judgment. Credit reference agencies receive the information from Registry Trust, an independent organisation set up by the Lord Chancellor's Department. Judgments that are paid within one month are removed from your records as long as a Certificate of Satisfaction has been issued by the court. Judgments paid after one month are kept on report but marked as 'satisfied' once a Certificate has been issued by the court.

If you have been declared bankrupt, credit reference agencies will obtain this information from the official gazettes. It is kept on your report for six years after the date of the bankruptcy order.

Information from lenders

Credit reference agencies hold information about credit accounts over the last six years. Lenders provide this information. Some lenders provide information only on customers who have failed to keep to the terms of their credit agreement - these records are known as 'defaults'. However, most lenders provide information throughout the life of every credit account. Lenders can use the information to identify good payers as well as bad payers and those who already have several credit accounts.

Credit accounts can be classed as 'settled', 'active', 'defaulted', or 'delinquent'. A settled account is one where you have repaid your credit. Credit agencies keep a record of settled accounts for six years from the date you paid off all amounts owed to that account. The payment history shown on your report will relate to the period before you repaid your credit. An active account is one which you are still using. Agencies keep a record of these accounts until they are settled and then for six years afterwards. A defaulted account is one where you have not kept to a credit agreement. Agencies keep a record of these accounts for six years from the date you broke the relevant term of the credit agreement. The record will show how much money you still owe (the default). If you have paid off everything you owe since you broke the credit agreement, the account will be shown to be 'satisfied' at the balance. A delinquent account is one where your repayments have been at least three months in arrears for two or more consecutive months or have been late for more than three months over the past year.

Every record of a credit account will include a status history showing whether or not payments have been made on time. Credit accounts can include your payment record over up to 36 months. The most recent payment is shown as the first entry. The last 12 months' payments are shown, and underneath there is a summary of the payment history over a period of up to 36 months (unless the status history shown is '8'). In the summary, the entries for 'number of status 1-2' and 'number of status 3+' identify how many times payments been up to two months late, or three or more months late, within the last 36 months (or since the account was opened).

Members of the Council of Mortgage Lenders record information on customers who have given up their homes or had them repossessed. The information may include the address of that home, the address from which the mortgage application was originally made, and the address the customer has moved to.

Other Information

A record of lenders who have searched your report as a result of you applying for credit will be shown on your report for 12 months. This information can help lenders identify any unusual credit activity or overcommitment.

If your report specifies 'unrecorded enquiries', this shows that a company has searched your report for non-lending purposes. However, this information is shown only to you, not to lenders searching your report in order to make a lending decision. Lenders may also search your report to give you a credit quotation. These are recorded as quotation searches so other lenders do not mistake them for credit applications. Agencies make a record (known as a 'footprint') on your report to show that a report has been applied for in your name and address, but this will be shown only to you and not to lenders.

Your previous addresses, or any addresses you may use for correspondence, may be listed on your credit report. These links are created by account information moving between addresses, as a result of lenders checking your records at previous addresses, or as a result of information you give to the credit reference agency. Your credit report will show the two addresses that are linked, how the link was created, and the date and source of the link. The link will only be broken when agencies are asked to do so by the organisation that created the link.

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CIFAS

CIFAS is a system developed in consultation with the Office of Fair Trading and the Office of the Information Commissioner. It aims to detect and prevent fraud, and so protect innocent people whose names, addresses or other details are used fraudulently by others in order to get credit. A CIFAS warning on your report does not mean you are being accused of fraud. Organisations who are members of CIFAS examine credit applications very carefully, and may contact you to make sure you have applied for the credit. They will not automatically refuse applications from people with warnings on their report.

GAIN - Gone Away Information Network

Credit reference agencies are members of GAIN, a network through which lenders share information on customers with debts who have moved home without telling their lenders of a forwarding address. The information may include both the address the customer moved from and any address the customer has since been recorded as living at.

If you share a financial responsibility with someone else, for example a joint court judgment, a joint account or a joint application for credit, this will be shown on your credit report together with who you share the responsibility with and when the connection was created.

Agencies may be told about any other names you have been known by and your report will show who gave them the information.

Information about other people

Your file may include financial information about members of your family who live, or have lived, with you. Lenders can take this information into account when assessing an application you make for credit. By law this information must be included on your credit file because you must be shown all the information that is available to lenders, whether or not they use it.

The rules on using information about other people are changing and, in the future, financial information about other people will not be included on your file. After these changes have been made, only your own credit history, and that of anyone you share a financial responsibility with, will be provided to a lender.

To view your personal credit information that lenders are currently basing their credit decisions on, apply online for a credit report from Experian, the UK's largest credit reference agency, now. You will also receive a 30-day free trial to the CreditExpert Monitoring Service from Experian.

Click here for a free 30-day trial of CreditExpert and to get a free copy of your credit report

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How does my credit report affect me?

The contents of your personal credit report can have a bearing on whether or not you are given credit. Factors other than the information held on a credit report may contribute to a lending decision as well (such as the information you provide on your application form), but your credit report is important.

Your credit report can affect your ability to:

• Get a loan
• Get a credit card
• Obtain a mortgage
• Credit scoring

It's important to be aware that different companies use different methods when they are deciding whether or not to give you credit. You do not have a single credit score and credit scores are not shown on your credit report.

Get it right!

As the information held by credit reference agencies is used to determine what credit you can obtain, it is important those details are right. To view your personal credit information that lenders are currently basing their credit decisions on, apply online for a credit report from Experian, the UK's largest credit reference agency, now. You will also receive a 30-day free trial to the CreditExpert Monitoring Service from Experian.

Click here for a free 30-day trial of CreditExpert and to get a free copy of your credit report

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How can I make changes to my credit report?

There is a variety of information held on your credit report from a variety of sources. If any of it is wrong, it could affect your ability to get credit.

Your credit report
Click here for your free credit report

Here's how to correct the information held on your report.

The electoral roll

If you have registered to vote and your credit report does not show this, please contact the credit reference agencies listed at the bottom of this article and they will investigate the matter. If you have not registered to vote, you may want to contact your local authority about filling in an electoral registration form or visit www.aboutmyvote.co.uk. If you move home you can tell your local authority who will tell credit reference agencies about your change of registration in the course of the year.

Court judgments

If you believe a county court judgment has been recorded incorrectly, you should contact the county court, quoting the case number included on your report. If the judgment was recorded incorrectly the county court will alter their records. Credit reference agencies are told about any such changes within four weeks, but if you give them original court documents, in the form of a Certificate of Satisfaction or Cancellation, they may be able to change their sooner if necessary.

If you have paid a Scottish Decree, you should send Registry Trust (address below) a receipt or a letter from your creditor (known as the pursuer) to confirm your payment.

If you write to Registry Trust Ltd questioning the accuracy of a judgment recorded on your report, asking for an entry to be changed, you should send a cheque for £4.50 to cover their search fee. They will then tell the credit reference agencies about any change to your report.

For judgments made in Northern Ireland, if you provide documents from a plaintiff to confirm a payment, the agencies will change their records. If you have any questions about the accuracy of a judgment recorded on your report, contact the court concerned.

Registry Trust Ltd.
173-175 Cleveland Street
London W1P 5PE

Bankruptcies

If a bankruptcy order against you is annulled (cancelled) or discharged (that is, you have met all terms), you should send a copy of the Annulment Certificate or Order of Discharge to the credit reference agencies. They will then update their records. If your bankruptcy has been annulled they should completely remove any record of it from your report. If your bankruptcy has been discharged a record of it will be kept on your report but it will show that it has been discharged.

Voluntary arrangements

If you have any questions about a record of a voluntary arrangement you should contact the supervisor who dealt with your case. If you send documents from the supervisor to confirm that the information on your report needs to be changed, the agencies will change their records.

Credit accounts

After carefully studying the credit account details (credit cards, loans, mortgages, etc.) on your file, if you believe any information needs to be changed you should write to the lender concerned and ask them to give the correct information to the credit reference agencies.

Searches

Credit reference agencies will delete searches only when they are instructed to do so by the company who searched your report. If you are concerned about the accuracy of a record of a search, you should contact the company which carried out that search.

Linked addresses

Links between your previous addresses, or any addresses you may use for correspondence, may be listed on your credit report. The link will only be broken when the reference agencies are asked to do so by the organisation that created the link.

CIFAS

If you have any questions about a CIFAS record, write to the organisation concerned. If you disagree with that organisation over the information on your report, ask the organisation for details of the scheme for settling disputes.

Associations

A record of an association shows a financial link you have with someone. These links are created by joint judgements, joint accounts and joint credit applications, or from information you gave to credit reference agencies or lenders. Associations are not created between business partners. The information you see will include the details of the person you are financially connected to (the associate), the name of the company which created the link, and the date the link was created. Lenders may also see the financial information relating to the associate. This allows lenders to view all the information that may be relevant to your credit application. Information about an association is held on record indefinitely. If your associate needs to see their credit report, they will need to apply separately.

Aliases

If any names are shown on your credit report that you have never used, you should contact the company listed as providing the other name, or write to the credit reference agency and they will investigate the matter and make any necessary changes to your report.

Information about other people

Your credit report does not include financial information about a partner or family member, but it will list the names of anyone you are financially linked to (such as people you have joint accounts with). In the past, when you applied for your credit report you saw all the information that might be seen by lenders, including information about family members who live, or used to live, at the same address. Now, lenders only see information about other family members that are financially linked to you.

Furthermore, the credit reference agencies have removed all family financial information from the credit reports they send to people. If you believe that information about someone you are financially linked to is the reason for you being refused credit, you might want to ask them to apply for their own credit report. Of course, they do not have to order their report or show it to you.

To view your personal credit information that lenders are currently basing their credit decisions on, apply online for a credit report from Experian, the UK's largest credit reference agency, now. You will also receive a 30-day free trial to the CreditExpert Monitoring Service from Experian.

Click here for a free 30-day trial of CreditExpert and to get a free copy of your credit report

Credit reference agencies
Experian Consumer Help Service, Experian Ltd, PO Box 8000, Nottingham, NG80 7WF
0870 241 6212
Equifax plc, Credit Report Advice Centre, PO Box 3001, Glasgow, G81 2DT
Call Credit, Consumer Service Dept, Park Row House, Leeds, LS1 5JF.

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What to do if you've been refused credit

There could be many reasons why a lender has refused to give you credit. You may have too many debts already to pass their credit scoring check or personal information on your credit report might be incorrect.

If you are declined credit the lender should tell you the main reason for this - whether their decision was based upon a credit score, information held on your credit report or on their own specific policy. If the decision was based upon your credit report, the lender should tell you the name and address of the credit reference agency they used.

Click here for a free copy of your Experian credit report

Always check your credit report!

It always makes sense to obtain a copy of your credit report either before you make an application or if you are declined credit as a result of the information held by a credit reference agency. Your credit report will include all the information that any company you apply to may see and should help you to establish why your application to them was declined. It will not state the reason you have been declined because only the company you applied to will know this.

Do not make repeated applications for credit once you have been declined. Each application you make is likely to result in a search of your credit report. These searches will be registered and could affect future applications. Establish why your application was declined before making further applications.

Things to remember

Once you have received a copy of your credit report, remember: If your name is not registered on the Electoral Roll, contact your Local Authority and request that they add it. Credit reference agencies (Equifax, Call Credit and Experian) will then amend the details once notified by yourself or the relevant Local Authority.

If you have paid a County Court Judgment, make sure that it is shown as satisfied on your credit report. If it is not, contact the County Court and obtain a Certificate of Satisfaction. All credit reference agencies will be notified of the change within four weeks. If you believe a judgment has been incorrectly registered, contact the court in question.

If a Bankruptcy Order has been discharged or annulled and this fact is not shown on your credit report, send a copy of the Order of Discharge or Annulment to all Credit Reference Agencies and ask for your report to be updated.

If you can pay any outstanding payments shown against credit account information, contact the lender concerned and also ask that they advise all Credit Reference Agencies so that their records can also be amended.

If a credit account has been paid but this is not shown on your credit report, contact the company concerned and ask them to make the necessary changes.

If companies have searched your credit report more than once in response to only one application, again, ask them to make the necessary amendments.

If you have been linked to addresses with which you have no connection, contact the companies who created the links and ask for the address link to be deleted.

You may wish to add an explanation or 'Notice of Correction' to the information held, e.g. the reasons why an account fell into arrears at a particular time. This 'Notice of Correction' can be up to 200 words. Any future lender who sees the entry to which it relates will also see the Notice.

It is valuable to monitor the information held by credit reference agencies and to ensure that it shows what you believe to be an up-to-date and accurate reflection of your credit history.

View your personal credit information that lenders are currently basing their credit decisions on. Apply online now for your credit report from Experian, the UK's largest credit reference agency. You will also receive a 30-day free trial to the CreditExpert Monitoring Service from Experian.

Click here for a free 30-day trial of CreditExpert and to get a free copy of your credit report

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Are you on a credit blacklist?

The simple answer is no, you're not. There is no such thing as a blacklist. Credit reference agencies only display factual information about people, most of which is provided by lenders. They do not offer opinions about your creditworthiness (that is, whether you are likely repay credit). Companies make their lending decisions using credit scoring based on information held by credit reference agencies, additional information you may have provided, plus their own internal processes. The information credit reference agencies hold shows that most people are actually good payers and make repayments on time.

What is credit scoring?

Credit scoring is a technique used by companies to help them assess the risk involved in lending someone money - it involves building a score based upon the details provided by you on the application form and the information held on your credit report. It may be that the information you supplied on your application form meant that you did not fit the lender's 'customer proreport' and that the information held by a credit reference agency did not affect the decision. Different companies take different information into account and therefore your application may be accepted by one company but declined by another.

If you are declined credit the lender should tell you the main reason for this - whether their decision was based upon a credit score, information held on your credit report or on their own specific policy. If the decision was based upon your credit report, the lender should tell you the name and address of the credit reference agency they used.

Always check your credit report!

It always makes sense to obtain a copy of your credit report either before you make an application or if you are declined credit as a result of the information held by a credit reference agency. Your credit report will include all the information that any company you apply to may see and should help you to establish why your application to them was declined. It will not state the reason you have been declined because only the company you applied to will know this.

Do not make repeated applications for credit once you have been declined. Each application you make is likely to result in a search of your credit report. These searches will be registered and could affect future applications. Establish why your application was declined before making further applications. It is valuable to monitor the information held by credit reference agencies and to ensure that it shows what you believe to be an up-to-date and accurate reflection of your credit history.

To view your personal credit information that lenders are currently basing their credit decisions on, apply online for a credit report from Experian, the UK's largest credit reference agency, now. You will also receive a 30-day free trial to the CreditExpert Monitoring Service from Experian.

Click here for a free 30-day trial of CreditExpert and to get a free copy of your credit report

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What is credit monitoring?

Ever been taken by surprise and turned down for credit? Have you read about the growth of identity fraud and do you worry about becoming a potential victim? With the new CreditExpert Monitoring Service from Experian, the UK's largest credit reference agency, you needn't worry again. You can now keep track of your personal credit information and be informed when key information on your credit report changes.

Your credit report
Click here for your free credit report

CreditExpert is a subscriber service, which gives you more control over your credit information and also helps you protect yourself against the growing threat of ID fraud. It provides you with unlimited online access to your personal credit report and alerts you when activity has taken place on your credit report. Weekly alerts are sent to personal email addresses or via SMS text. As soon as an alert is received, you can link to www.creditexpert.co.uk, where you have unlimited access to your full and up-to-date personal credit report, to see what changes have taken place. If the activity is not legitimate or is inaccurate, e.g. someone has applied for a loan in your name or the lender has provided incorrect information to the credit reference agency, there are tools and resources available to help you take appropriate actions to stop further problems. If the activity is legitimate, you have the peace of mind of knowing that your valuable personal credit data is sound.

CreditExpert is the first and only service in the UK to provide you with unlimited online access to your full credit history, which is even more than a lender would see. With CreditExpert, reports will include information such as loans, loan terms and repayment history, plus the source of that information. In addition, you will be able to see the public information that forms part of your credit report.

CreditExpert offers a 30-day free trial of its new credit monitoring service, which also includes a free personal credit report. In addition, the service comes with a 90-day money back guarantee, an online quarterly newsletter with topical articles and features on personal finance issues, access to useful tools and calculators to help you with personal finance decisions and numerous online resources to address potential credit queries.

Click here for a free 30-day trial of CreditExpert and to get a free copy of your credit report

What are file alerts?

CreditExpert weekly file alerts will give you confidence in knowing about significant changes to your credit report.

Your credit report is checked for the following changes:

• The addition or deletion of a credit account.
• A change in the payment history of a credit account.
• The addition or deletion of a judgment, voluntary arrangement, or bankruptcy.
• A search of your credit report.
• The addition or deletion of a Notice of Correction.
• The settlement of a credit account.
• A significant balance change on a revolving credit account opened within the last six months.
• Although unlikely, if there are more than four changes to your credit report, you will receive a maximum of four alerts.

To view your personal credit information that lenders are currently basing their credit decisions on, apply online for a credit report from Experian, the UK's largest credit reference agency, now. You will also receive a 30-day free trial to the CreditExpert Monitoring Service from Experian.

Click here for a free 30-day trial of CreditExpert and to get a free copy of your credit report

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What is identity fraud?

What would you do if your credit cards were stolen? If goods that you did not purchase were charged to your credit accounts? If unauthorised credit accounts were opened in your name?

Your credit report
Click here for your free credit report

These actions are typical examples of identity fraud, where criminals steal victims' identities in order to take over their credit accounts or to open new accounts in their names. Most of us have never experienced identity fraud and many of us may be unconcerned and believe we're not affected by it. But we are.

Identity fraud affects everyone

Identity fraud is on the increase and is the UK's fastest growing crime. According to the Cabinet Office, identity fraud costs the UK at least £1.3bn every year and is one of the more difficult frauds to combat. The trouble with a successful fraud is that both consumers and lenders are fooled. Although lenders are employing ever-more sophisticated methods to spot fraudsters, people who are targeted by fraudsters often take up to 14 months to realise they are victims of identity fraud.

When criminals buy goods and services on credit using false information, we all pay through higher prices and more expensive credit terms, even if our own accounts are untouched. And when someone is victimised by a particularly successful scam, criminals are more likely to continue cheating others using similar fraudulent operations.

Some typical scams

The rise in Internet usage has meant an increase in the number of online scams. Here are some examples:

The Nigerian scams

The fraudsters send emails to people telling them they can release a fortune that is tied up in an African bank by allowing them to transfer the money into the person's account. In return, the person will be given a share of the profits.

Another variation on this is an email supposedly from the widow of a high-ranking Nigerian official pleading for the recipient to help her access her late husband's money. Again, the recipient is asked for their bank details.

The catch with these scams is, of course, that rather than money going into the person's bank account, the fraudsters clean them out using the details sent to them.

Phishing

This form of fraud has made headlines recently, with Barclays, Lloyds TSB, Natwest and even the Bank of England affected.

Barclays customers were sent emails saying that the bank was making technical changes. There was a link to go to a page where customers were prompted to enter their account details. Lloyds TSB customers received emails saying their accounts would be cancelled due to a new security measure unless they went to a site and entered their details.

Natwest, Halifax and Nationwide customers were sent emails saying they needed to verify their accounts by going to a site and entering their details. An email supposedly sent from the Bank of England urged people to download anti-virus software.

The fraudsters set up "spoof" email addresses that look like they could credibly belong to the institution. Once they have received account details, they siphon money out via "mules" - people with UK accounts - to their own accounts abroad. These scams are believed to be run from Eastern Europe.

Lottery and prize draw wins

Emails are sent out to people telling them they've won a lottery or prize draw and they need to send a payment for "administrative" or some other purpose in order to claim their winnings. Of course, there is no prize...

CreditExpert is an online service offered by Experian that monitors your credit report and alerts you if anything changes.

Click here for a free 30-day trial of CreditExpert and to get a free copy of your credit report

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How to avoid identity fraud

Here are some ways to help reduce the risk of your identity being stolen:

Your credit report
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Be careful who you give personal information to. Check the identity of people who call, for example saying they are from your bank or credit card company, and ask for sensitive information. Call them back using the number Directory Enquiries gives you for the organisation.

Only use secure websites when submitting personal information over the internet (look for https:// in the URL or the padlock sign at the bottom of the page) visit www.cardwatch.org.uk for further tips.

Shred sensitive rubbish (such as bank statements, utility bills, credit card receipts).

Contact your local post office immediately if your mail suddenly stops arriving (fraudsters have been known to redirect people's mail).

If you move home, get a copy of your credit report to help you remember to give your new address to all the companies you deal with. Register with the Mailing Preference Service to take your name and previous address off the majority of UK mailing lists and arrange for your mail to be forwarded by the post office.

Why not try a 30-day free trial of the CreditExpert Monitoring Service from Experian, which alerts you to changes to your credit report.

Click here for a free 30-day trial of CreditExpert and to get a free copy of your credit report

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