How My Address Can Influence a Credit Check

Posted by George Coburn in Credit Reports on 12 June 2018 - George is a Credit Analyst at checkmyfile

Many people incorrectly assume that their Credit Score can be plagued by the previous occupants of your address. This, to quote Douglas Adams, is “a load of dingos’ kidneys” and your Credit Report should entirely reflect your credit history and public information, with no bearing whatsoever on your address or the home’s former tenants.

However, the way your address appears on your Credit Report can make a big difference to lenders and if you’ve had issues with credit checks not being able to verify your address in the past, your address format is a good place to start looking.

Does my address affect my Credit Rating?

Your credit rating is based on your information and yours alone: where you live and anything relating to previous tenants or your neighbourhood's collective finances cannot affect your ability to get credit. That also means it doesn't matter how many times you move or change your address, your Credit Score or ability to take out credit should not be affected.

However, the way that Credit Reference Agencies report your address can have a major impact when it comes to applying for credit, which is why it’s essential to make sure all your info is correct before it causes you a setback when you apply for credit.

If the address you provide to lenders does not match your address as it appears on your Credit Report, chances are your application may be declined there and then. You can change any incorrect information on your Credit Report, but it's essential to make sure this is done before you apply for credit and with enough time to allow the Credit Reference Agencies to update your information for your best chances of getting accepted for a loan, mortgage or finance.

You can see how your address appears to lenders by checking your Credit Report - checkmyfile offers the UK's most detailed Credit Report, letting you see information from four Credit Reference Agencies, not one.

You can try checkmyfile free for 30 days then for £14.99 a month afterwards, which you can cancel at any time.

Why your address matters during a credit check

Your address is essential for credit checks, whether you’re applying for credit, a job, renting a property or getting insurance quotes – without being able to verify your current address, the checks can’t proceed. In addition to this, your Electoral Roll status is an essential factor in any Credit Report, due to the implied stability of someone with an active listing. Where this whole process can fall apart though is when your address can appear on your Credit Report in a different format.

When applying, you may need to provide one current and two previous addresses, which are then used by the Credit Reference Agency to return all information in these from the given residences. If your information is held under different address formats, it is likely an incomplete credit file will be returned by the agency or you run the risk of nothing being returned at all, which may ultimately result in a declined application.

How do issues arise?

If you’re one of the many people who live in a property with the normal house number/street name address format – for instance 42 Douglas Adams Drive – you should be okay when applying for credit as there are no other ways the address can be written. Issues can arise however when your address can be written a number of variations.

If your house was called “Deep Thought”, your full address might be read as any of the following:

  • Deep Thought, 42 Douglas Adams Drive
  • Deep Thought, Douglas Adams Drive
  • 42 Douglas Adams Drive

Let’s say your lenders hold ‘42 Douglas Adams Drive’ and your Electoral Office holds ‘Deep Thought, 42 Douglas Adams Drive’, you run the risk of only one address being returned on a credit check due to the differing formats.

For this reason, it is essential that your Electoral Roll listing and accounts all use the same version of your address. This seems simple but in our experience dealing with these matters, what can potentially cause havoc with this is when the variety of different address databases hold different formats of an address.

How postal databases deal with different formats

There are a number of databases of addresses in the UK which can cause further confusion or issues. The Royal Mail operates the Postcode Address File (PAF) and, to avoid dealing with multiple address formats, many companies will often stick religiously to this database. Another source of addresses, which is commonly used by councils, is the Land Registry.

Commonly, those living in flats face an issue when the Royal Mail has one format for their address but their council has a completely different one. Where we see this the most is in Scotland where a flat may be known as either ‘1/2 Douglas Adams Drive’ or ‘2F3, 2 Douglas Adams Drive’. The first format will be what we’d expect to see on the Royal Mail’s PAF and the latter is often from the Land Registry.

Another common issue with flats happens when people provide different formats of their address to lenders. Wording may be used differently, so someone may say they live in ‘Apartment 1’ to one lender, ‘Flat 1’ to a different one and then ‘First Floor Flat’ to a third. When applying for credit, the consumer would only be able to use one of these formats so information from the other two would unlikely get returned.

Furthermore, when being interpreted by an agency, if it receives account information ‘First Floor Flat’ but the Royal Mail doesn’t list this address, the agency may not know how to enter the account to their records meaning it doesn’t get returned on a credit check.

In this example, it is highly likely that you’ll encounter difficulty getting a complete Credit Report from the agencies, as your accounts would probably need to be registered to the PAF format while your Electoral Roll listing under the Land Registry one. The best way to get around this is to get everyone singing from the same sheet which may involve convincing your council to change to the PAF format or registering the alternative format with the Royal Mail.

Communal accommodation

If you live in communal accommodation like student halls, a hotel or military barracks then your address is commonly referred to as a ‘large user address’ and these too can cause a massive issue for credit checks. As many lenders/agencies cannot go into enough detail for these addresses – such as narrow down to the exact location in a barracks – it is very common for an incomplete/empty file to get returned by the agencies.

PO Boxes & business addresses

In the case of PO Boxes or business addresses, not all companies or Credit Reference Agencies will allow for account information to be registered to these types of address. Where possible, you ideally want your consumer accounts to be registered to your home. If you need correspondence such as bank statements or phone bills posted to your work address, this can often be set up as a separate correspondence address with the lender.

How can I make sure my address looks good to lenders?

So what do you need to do to make sure you're address is in good shape to show lenders? You’ll need your Electoral Roll listing and accounts to hold the same format for your address and this needs to be consistent between the three agencies. Only when this is done can you guarantee a complete credit file will be returned when you apply for credit.

One extra thing worth considering is that each Credit Reference Agency will hold address information for you, but if they have conflicting or different address info, this could be an issue depending on which Agency your prospective lender uses, which is why it’s important to .

When you check your Credit Report with checkmyfile, you’ll be able to see all your address links across the four credit reference agencies in the UK, so you’re covered for most major credit applications. This will include variations on any address you have recently lived in, so you’ll be able to see any errors in the way they’ve been recorded. The credit reference agencies can remove these, so there shouldn’t be any confusion when you next apply for any form of credit.

You can try checkmyfile free for 30 days and then for £14.99 a month, which you can cancel at any time.

Updated by Jamie Mackenzie Smith 11/02/19

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