What doesn’t appear on your credit report?

Posted by Tom Blandford in Credit Reports on 19 January 2018 - Tom is a Credit Analyst at checkmyfile

People are often just as surprised at what isn’t reported on their credit file as what is. It can be a bit of a shock when they finally do come to check their report and find that a lot of their spending and earning has gone largely unheralded.

How credit reference agencies report your data

Your credit file is made up of extracts from many databases, such as credit account information reported by lenders, or Electoral Roll information purchased from local authorities. This gives prospective lenders an indication of your creditworthiness and aids in the decision-making process of whether credit can be provided, and the terms of the agreement if it is granted.

For information to be reported to the credit reference agencies, a reciprocal data sharing agreement must be in place between the organisation reporting the data and the credit reference agency. This means that a company reporting account information will also be eligible to see payment history reported by other lenders.

Consequently, any other individual or organisation (one that does not provide account information) that runs a credit check on a consumer would not have the required permissions to see a full report, and would only be provided with the public elements of the consumer’s credit file.

Even those organisations that have ‘full’ access to your credit file are limited in what they can see about you however.

What won’t appear?

As the top 250 or so lenders report payment history, your credit file will usually show most of the credit agreements you hold, however there are a lot of regular payments and other details that don’t feature on your credit file:

Council tax

While it could be argued that it may demonstrate an ability to make payments, council tax offices do not report payment history as council tax payments are not a form of credit.

Savings accounts or (in-credit) bank balances

The purpose of a credit file is to establish creditworthiness so bank accounts without overdrafts do not appear on credit reports, as there would be no credit facility attached to the account. Even where accounts with overdraft facilities are reported, it’ll only show the balance of that, not any positive cash balance you might have.

It is not uncommon for people with a substantial amount of owned wealth to be surprised at their low credit score, because of the misguided view that cash is a factor that lenders use to calculate it.

Employment

Employment details are not reported to the credit reference agencies. This is established separately during the application process when you confirm your salary, but will not have an impact on your score.

Property ownership

Homeowner status isn’t explicitly reported to the credit reference agencies however lenders may interpret the presence of a mortgage account as confirmation that you own property.

Student loans

Any student loans you currently have, or have had in the past, won’t show on your credit file. In most cases, repayments are taken directly from your salary, or included or repaid through your annual self-assessment. ‘Old style’ student loans – those taken out prior to 1998 - can affect your credit rating if you miss repayments.

Income

How much you earn will undoubtedly form part of any credit application you make, as it is a key factor in your ability to repay any borrowing, but it isn’t reported by credit reference agencies.

Old credit history

credit accounts are removed once 6 years have elapsed from the date of account closure, or 6 years from the date of default where accounts have entered default. This is because the primary purpose of your credit file is to help establish your creditworthiness and the Information Commissioner’s Office has stated that a 6 year period is both sufficient to confirm this, and is not unreasonably punishing to consumers with a negative payment history.

Information that does appear

There are some notable exceptions, such as with insurance products; these will rarely appear on your credit file as insurance is not usually classed as credit. However some lenders may report payment history if you opt for monthly payments on a fixed term as this can be classed as a loan.

Despite the information that does not appear on credit files, it cannot be understated that credit files hold a great deal of valuable information. Here are a few examples:

Credit accounts

A history of making payments on time is crucial for prospective lenders and the amount of accounts showing a positive payment history will compound their effect on your credit score.

Electoral Roll information

this can be used verify your presence at an address and is of vital importance to a credit file. Electoral Roll information implies stability at an address when reported for a longer period of time and has historical significance as the index for all other credit reporting data to be matched to.

Court information

this mainly includes court judgments, and insolvency records. Due to their negative connotations, the presence of either court information often results in a declined application.

If you haven’t already checked your credit file, you can see your Multi Agency Credit Report at checkmyfile – it is free for 30 days, and then costs just £14.99 per month, and you can cancel at any time.

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