Mortgage321

Understanding Credit Reference Agencies in the UK: What You Need to Know

Jan 27, 2025By Matthew Pigrome

MP

When applying for a mortgage, your credit file plays a critical role in determining your eligibility and the terms you’re offered. Understanding how credit reference agencies (CRAs) in the UK operate can help you prepare and improve your chances of securing the right deal.

KNOWLEDGE IS POWER


At Mortgage321, we believe knowledge is power, so here’s a guide to the major CRAs in the UK and how they record data.

The Major Credit Reference Agencies in the UK

There are three main credit reference agencies in the UK, and lenders use their data to assess your financial history and creditworthiness:

1. Experian

  • Experian is one of the largest CRAs in the UK, known for its detailed credit reports.
  • Credit scores range from 0 to 999.
  • Reports include payment histories, credit account details, and public records such as County Court Judgments (CCJs) or bankruptcies.

2. Equifax

  • Equifax offers credit scores ranging from 0 to 1,000.
  • Focuses on similar data to Experian, including credit limits, payment histories, and defaults.
  • May also include address links and lender search footprints.

3. TransUnion

  • TransUnion uses a credit score scale of 0 to 710.
  • Often associated with services like Credit Karma, which provide free access to your score.
  • Includes data on payment histories, credit accounts, and searches conducted by lenders.
    Hanging File Labelled Confidential

How Credit Reference Agencies Record Data

CRAs collect financial data from various sources to build a picture of your creditworthiness. Here’s how they do it:

  • Lenders and Financial Institutions: CRAs receive updates from banks, credit card companies, and other lenders about loans, credit card accounts, and payment histories.
  • Public Records: This includes details about County Court Judgments (CCJs), bankruptcies, and insolvencies that may affect your creditworthiness.
  • Electoral Roll: Your presence on the electoral roll helps verify your address and confirms your identity.
  • Search Footprints: When lenders check your credit file, these are recorded as “soft” or “hard” searches. Soft searches don’t affect your credit score, while hard searches can impact it if conducted frequently.
    Graph Stock Chart Stock Market Digital FUI

How Long Is Data Kept?

Negative data, such as missed payments, defaults, or CCJs, will stay on your credit file for six years from the date of the issue. Positive financial behavior, such as making payments on time, will also remain on your file, helping to boost your creditworthiness.

Why Reports Can Vary

Not all lenders report to every credit reference agency, so your credit file may look slightly different depending on which CRA’s report you access. For this reason, it’s a good idea to check your credit history with all three agencies to get a complete picture.

Did you know?

Tips for Managing Your Credit File

  • Regularly check your credit file with all three CRAs to ensure accuracy and identify any issues early.
  • Ensure you’re registered on the electoral roll at your current address.
  • Avoid unnecessary credit applications to minimize hard search footprints.
  • Address any missed payments or defaults promptly to start rebuilding your credit.

How Mortgage321 Can Help

At Mortgage321, we always review your credit file as part of the mortgage process. This allows us to identify any potential issues and guide you toward the most suitable lenders, even if your credit history isn’t perfect.

If you’d like to discuss your credit file or get expert advice on securing a mortgage, get in touch with our team today on 01255 440142. We’re here to help you every step of the way.