Understanding your credit report and your credit score can be essential if you want to keep your personal finances healthy. This means you can apply for credit with confidence, or even know if you’ve been the victim of fraud.
What’s on your credit report?
Your credit report is basically your financial resume. It is a record of your financial life, including the accounts you hold, the money you have borrowed, and information about your identity. It is there so that lenders can confirm that you are who you say you are and that you are a reliable borrower.
So what exactly is on your credit report? Let’s break it down:
- A list of your credit accounts – bank and credit cards, utility company loans and debts
- Details of any person financially related to you, therefore any person with whom you have taken out a joint loan
- Information such as CCJs, repossessions, bankruptcies and IVAs
- Your current account provider and your overdraft details
- Whether or not you are on the voters list
- Your name and date of birth
- Current and previous addresses
- Whether or not you have committed fraud, or if someone has stolen your identity and committed fraud
You will find all this detailed information in your report. It is therefore worth checking that all the information in the file is correct.
All details on fraudulent actions will be kept in the Cifas section. Cifas is a national fraud prevention program and it can place markers on your credit report to highlight if you’ve been the victim of identity theft.
How to check your credit report?
There are three Credit Reference Agencies (CRAs) in the UK: Equifax, Experian and TransUnion.
You might be wondering why there is more than one ARC. Well, not all lenders share their data with all three rating agencies. It is therefore worth checking your credit report with each one as they may differ depending on the lender who shared what information.
It is possible to check your score for free, as all credit rating agencies are required to provide you with a copy of your credit report without charging you. Alternatively, each of the agencies offers some sort of full credit monitoring service that you will usually pay for after the initial trial period.
Is a credit report different from a credit score?
In short, yes. Your credit report is different from your credit score. In fact, you don’t have a universal credit score.
If this just blew you away, let me explain. A credit score is an assessment by a particular lender of whether or not you are at risk in lending. It is based entirely on their own evaluation criteria.
You may find that the credit rating agencies provide you with a “credit score”. But in reality, this is only an indication of what your credit score might be with a lender based on the information they have.
If you have a “good” credit rating, there is no guarantee that your application will be accepted and that you will be offered the full rate. It just depends on the lender and whether or not they are happy to lend to you. That being said, the better your credit rating, the greater the chance that you will be able to borrow money.
How do I understand my credit score?
As we have seen, there is no such thing as a universal credit score. So figuring out this can be quite tricky. The scores you get from each of the credit reference agencies will all be different.
So here’s a look at how each ARC presents scores:
- Experiential – Scores are divided into five categories: very bad (0-560), bad (561-720), fair (721-880), good (881-960) and excellent (961-999).
- Equifax – The scores are over 900. Good is 400-474 and excellent between 475 and 900.
- TransUnion – TransUnion has a slightly different system. The scores are over 1000 but are accompanied by your credit rating. So your “overall creditworthiness” will also be noted as a number from one to five.
If you are unhappy with your credit score, there are ways to improve it. Check out our article on how to improve your credit score.
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