Covid 19 Status

In line with HM Government requirements to fight the spread of Covid-19 we have measures in place to ensure that we protect our staff, their families and the wider community, but also to ensure that there is minimal disruption to our customers.

Your access to online Multi Agency Credit Reports, Expert Help and Account Management remains unaffected. We take great pride in the support that we provide to our customers and throughout this period will do all we can to minimise the impact on our services. While the country remains in lockdown we will continue to support your queries via a dedicated and experienced team that will be securely working from home, and supported by a Management Team that will continue to be based at our head office and who will be able to provide customer support as required.

The security measures that we have in place to protect your Personal Data, in line with our Privacy Policy, will mean that some elements of our personalised support are affected during this period as our support team will be working with anonymised data when working remotely. Freephone access to our Credit Analysts has been removed during this period while we focus our efforts on continuing to reply to all of your emails and secure messages within one working day.

Thanks for your understanding, and we hope to have full customer support available as soon as possible and wish you well during these challenging times.

CREDIT REPORT SERVICES AND ONLINE EXPERT HELP ARE FULLY OPERATIONAL - PHONE LINES ARE CLOSEDCOVID-19 STATUS

ONLINE SERVICES FULLY OPERATIONAL
PHONE LINES ARE CLOSEDCOVID-19 STATUS

10 Credit Myths Busted

Posted by Kirstie Day in Credit Score on 30 December 2019

Credit checks are an integral part of modern life: from buying a house or car to applying for a new job or passing a tenancy check, your Credit Report is remarkably versatile. But considering the important role Credit Reports can play, there are still a number of popular myths surrounding them. We’ll look at ten misconceptions to point you in the right direction.

All agencies hold the same information

There are four Credit Reference Agencies (CRAs) in the UK - namely Equifax, Experian, TransUnion, and Crediva. Lenders, banks, and mobile phone providers (to name just a few) share information with these CRAs, typically via monthly updates, which is then made visible to other companies for their own credit checking process. This sharing of information is based on the principle of reciprocity. Basically, by sharing information about their own customers, these organisations are then able to access data on applicants, in order to make more informed lending decisions.

Each lender has its own relationships in place, and can choose to share information with any one - or more than one – Credit Reference Agency. At present, Crediva only reports ‘public’ information such as Electoral Roll and Court data, so it’s the exception to the rule – Crediva will not hold any account information, while the other three CRAs will.

As a result, a Credit Report obtained from one CRA can differ to that held by another. Because the CRAs do not share information with each other, any organisation performing a credit check would only be able to see the information held by the CRA (or CRAs) that it searches.

If you haven’t already, you can view your Multi Agency Credit Report with checkmyfile, which includes all data from the four Credit Reference Agencies at once. Try us free for 30 days, then just £14.99 monthly, which you can cancel at any time without fuss online, or by freephone, or email.

Checking your report harms your credit score

One common misconception in the UK is that checking your own Credit Report will in some way count against you and damage your Credit Score. The good news is… it doesn’t!

It’s true that whenever an organisation searches your Credit Report it leaves a Search Footprint, which will be visible to you and some lenders, but the presence of these markers alone won’t harm your score. Depending on the reason for the search, for example, whether it’s an application for credit or a simple ID check, the type of search will vary. Searches can only really harm your Credit Rating if you were to make many credit applications in a very short space of time, which some lenders could interpret as a sign of desperation.

When you look at your own Credit Report an audit search is created. This is only seen by yourself and the CRA so you know when your information has been viewed.

The decision to lend or not is made by the agencies themselves

When you apply for credit, a lender will search your details with one or more Credit Reference Agency in order to obtain the information held on your Credit Report. Each lender then applies their own lending criteria to the data and (in most cases) uses automated credit scoring to determine whether or not to accept an application.

The decision to lend to you is entirely down to the lender alone; the Credit Reference Agencies only provide the data and have no say in the outcome of your application.

It’s worth remembering that the information held by the Credit Reference Agencies is taken from a number of different sources including lenders, courts and local councils, and CRAs do not ‘create’ any information themselves.

Having no loans or credit card in the past means a great Credit Score

Many people believe that if they have never borrowed, it proves they have never needed to be in debt and so should have an excellent Credit Score.

This is not the case. Without a Credit History on which to base a decision, lenders are likely to be more reluctant to approve an application, as they don’t have any evidence of how you have maintained your credit agreements in the past. Your Credit History is often the best indicator of how you are likely to manage credit in the future.

A non-existent or limited Credit History will therefore likely result in a lower Credit Score.

A bad credit score will haunt you forever

If you’re in the position where you have negative information on your Credit Report (even if it’s just a single missed payment), you can rest assured that this will not remain until the end of time.

Repayment information on your Credit Report will be removed after a set time period – for closed accounts, defaulted entries and court information, this is six years. Once this period has elapsed, the entries are typically removed by the CRAs within one calendar month.

Insolvency records such as bankruptcy will also remain on a Credit Report for a period of six years but will only be removed if marked as ‘Discharged’.

Whilst serious arrears and other negative information will almost certainly harm your ability to get credit, the impact that they have should diminish over time, especially if other credit accounts are well maintained. Once all negative information has been removed, it’s possible for your Credit Score to jump up quite considerably.

Closing accounts with late payments increases your score

Some people believe that they can increase their Credit Rating by closing down agreements that have late payments recorded against them, but this is a common misconception. Even if an account is closed, it will still be reported for a period of six years and will be visible to any lender that searches you.

Closing accounts that you no longer use could help an application in another way, though. Lenders could be reluctant to grant credit if you hold unused or ‘dormant’ accounts with large credit limits. By reducing the amount of available credit you have prior to applying, you could in theory make yourself less of a risk to lend to.

Being wealthy will result in a higher score

While you are asked about your salary information as part of a credit application, this is to reassure lenders that your monthly income is high enough to cover any monthly repayments and to help set an appropriate credit limit, once other outgoings have been taken into account.

Your salary information is never reported to Credit Reference Agencies and as a result does not form part of a credit scoring assessment.

‘Wealth’ in general is not reported by Credit Reference Agencies and so it’s quite possible to be cash-rich but have a poor credit rating and find it difficult to obtain credit.

Just because you’ve got a healthy bank balance, doesn’t mean you’ll be a responsible borrower, so lenders apply the same scoring criteria to everyone.

Previous occupants at your address can affect your own rating

When you move into a new property, one of the last things you want to worry about is previous occupants having left unpaid debts registered at the address. Although it’s undoubtedly annoying and can be worrying, it’s not something to lose sleep over - someone else’s debt is exactly that: theirs and theirs alone.

Even if debt collectors turn up on the doorstep, you’ve got nothing to worry about if the person they’re after no longer lives there and isn’t financially associated to you - just follow our steps on how to deal with debt collectors.

Credit information is based on individuals, not their addresses.

Paying a default means it will be removed immediately

Unless you pay within 14 days of receiving a Default Notice, a default will remain on your Credit Report for six years regardless of whether the full amount has been paid or not.

Although a lender will be able to see that the balance has been paid in full (and as a result you may look slightly more appealing to potential lenders), many lenders see the presence of a default in the first place as reason enough to not offer you credit.

I can’t get credit because I’m on a Blacklist

One of the most common myths surrounding credit reporting concerns address blacklists and being declined if you live in a certain area. This is so widespread that there are all sorts of myths surrounding blacklists alone.

It is vital to remember that there is no such thing as an address blacklist. Lenders will assess your application using the data held on your Credit Report, including payment history, Electoral Roll information and any court or insolvency records held by the Registry Trust and Insolvency Service. Simply put, there’s no such thing as a blacklist.

The fact of the matter is that until you check your Credit Report, you have no idea what may or may not be affecting your ability to get credit. If you haven’t already, you can try checkmyfile free for 30 days, then for just £14.99 a month afterwards, which you can cancel online at any time.

Updated 30/12/2019 by Sam Griffin

Do Student Loans Affect my Credit Score?

According to government statistics for 2019, UK students (those currently studying and already graduated) owe a colossal £121 billion in outstanding student loans. To put this gigantic pile of UK debt into perspective, it overshadows the entire world’s combined annual budget for space programmes. All the cutting-edge, space-bound engineering and cosmic knowledge of the world’s most well-funded space agencies, NASA (US), ROSCOSMO (Russia), and CNSA (China) only collectively reach an estimated £28 billion a year – barely comparable to the grim achievement of today’s British students.

Published on 4 Mar 2020 by Sam Griffin

Full Article

What's More Important: Your Credit Score or Report Data?

The relationship between Credit Scores and Credit Reports is pretty cyclical: one being strong usually means the other is equally good and you should have easy access to credit, right? Well, in a way. You might be surprised though how much of a role a ‘score’ really plays when it comes to borrowing.

Published on 12 Feb 2020 by Paul Anderson-Riley

Full Article

Do we use FICO in the UK?

A US news story has dropped that’s generating some charged discussion about FICO, the American credit scoring company. FICO has recently announced that the way it calculates Credit Scores is changing. Due to a re-jig in its algorithm, an estimated '40 million Americans are likely to see their Credit Scores drop'.

Published on 10 Feb 2020 by Sam Griffin

Full Article

Bad credit on an address myths

When moving into a new house, the first thoughts that go through your mind could be along the lines of “what colour am I going to paint the kitchen?” or “will my wardrobe actually fit in the bedroom?” You may not immediately ask yourself “I wonder how much debt the previous occupant had!”

Published on 9 Jan 2020 by Kirstie Brown

Full Article

How does my ‘Credit Age’ affect my Credit Score?

Credit age is a difficult concept to define and can be tricky to get your head around. This isn’t about what year you were born – it’s more a reflection of how long and to what extent you’ve been using credit and is an important consideration when looking at your Credit Score - especially if you’re looking to improve it.

Published on 23 Dec 2019 by Andrew Brown

Full Article

Age matters when it comes to your credit score

Credit Action, the National Money Education Charity, scares everyone witless every month with unnerving financial statistics. A few examples include the fact that a property is repossessed every hour and 43 minutes, that every four minutes someone is declared insolvent, and that the Citizens’ Advice Bureau deals with 2,595 new cases every day. In its October 2019 statistics, the charity advised that average household debt is a mere £59,441 including mortgages. According to the BBC, the stat without mortgages has risen sharply to £15,385.

Published on 5 Dec 2019 by Barry Stamp

Full Article

Is there discrimination in credit assessment?

Apple could find itself in hot water in the US after a weekend of high-profile claims that applicants to its recently launched Credit Card were discriminated against on the basis of gender.

Published on 11 Nov 2019 by Barry Stamp

Full Article

Why do I get different Credit Scores?

The first ever idea of a Credit Score was introduced in the 1950s in the United States. Almost by accident, as Bill Fair and Earl Isaac discovered that a study looking at a potential predictor of ill health could be better used to predict bankruptcy and default. They teamed up to form Fair Isaac, Inc, now FICO, to sell credit scores to lenders. FICO scores are now household names by consumers in the US, as they are used extensively, with little competition.

Published on 3 Sep 2019 by Andrew Brown

Full Article

Does Gambling Affect Your Credit Score?

If you’re among the 32% of Brits that gamble on a weekly basis and are thinking of applying for some form of credit in the near future, you might be wondering whether your activity could affect your Credit Rating and your chances of being accepted.

Published on 13 Jun 2019 by Richard Catlin

Full Article

Can Social Scoring Really Affect Credit Applications?

Increased consumer awareness of the importance of a good Credit Score in recent years means that most people applying for a mortgage, loan or other form of finance know that the odds of their application being successful largely depend on the information contained within their Credit Report (among other factors) and how the lender in question interprets it.

Published on 24 Jan 2019 by Jamie Mackenzie Smith

Full Article
keyboard_arrow_left

keyboard_arrow_right

We are rated number 1 for customer service on