A Building Society is a financial institution originally set up to help people in a particular area buy their own homes.

Will my Building Society account appear on my Credit Report?

Lenders, including Building Societies, can share your credit agreements with the Credit Reference Agencies, where the account information will be loaded onto your Credit Report.

You can check how your reported accounts appear by viewing your Credit Report for yourself. checkmyfile makes this easy by collecting your data from three Credit Reference Agencies, not just one. Try it free for 30 days, then for just £14.99 per month. Cancel online any time.

Whether or not your Building Society account is reported by the Credit Reference Agencies will depend on what features it has. If it has an overdraft facility, then it is much more likely to show.

How do Building Societies make money?

A Building Society makes money by paying savers less interest than is charged to mortgage borrowers. Some Building Societies are ‘mutuals’ – which means that they are owned by their customers. Others have demutualised following the Building Societies Act of 1986 which allowed mutual Building Societies to convert into limited companies if more than 75% of members voted to do so.

Most Building Societies focus on one geographical area, except for Nationwide, which operates across the whole country.

For many years Building Societies have been merging with one another or have been bought by banks. Building Societies are now very similar to banks in many respects, although banks generally provide a much wider range of financial services and are considerably bigger.

What is the difference between a Building Society and a bank?

Account holders in a mutual Building Society become members of a mutual institution, which gives them voting rights on key issues that affect the governance of the business whereas banks operate to generate revenue for their shareholders.

Because Building Societies need to pay dividends to shareholders, better savings rates than banks are usually offered.