Credit Score Basics > What is a credit reference agency?

What is a credit reference agency?

Wollit Team2 minute read · Updated 28th July 2024

Credit reference agencies (CRAs) are companies that collect, store, and manage data related to credit histories, both for people and businesses. This data includes information about credit applications, accounts, payment history, and other financial behaviours. In the UK, the three main CRAs are Experian, Equifax, and TransUnion.

CRAs are important because the data they manage is used by lenders to understand how creditworthy borrowers are.

CRAs do not make lending decisions; instead, they provide lenders with the necessary information to make informed decisions regarding credit applications. This information is compiled into credit reports, which include a credit score that reflects an individual's creditworthiness based on their financial history.

How do credit reference agencies work?

CRAs operate by gathering data from various sources, including:

Lenders: Banks, credit card companies, and other financial institutions report credit activity to CRAs, including payment history and outstanding debts.
Public records: Information from public records, such as bankruptcies, county court judgments, and the electoral register, is also included in credit reports.
And other sources: For example, you can report your own rent payments to show lenders that you pay your bills on time.

Once the data is collected, CRAs analyse it and put together your credit file. This credit file can be shared via credit reports with lenders when you apply for credit. The lenders use this information, along with their own criteria, to decide whether to approve or deny your application.

What information do credit reference agencies hold?

CRAs mostly hold credit-related information or information needed to verify your identity, like:

Personal details (name, address, date of birth);
Credit accounts (type, balance, payment history);
Public records (bankruptcies, court judgments);
Any financial connections (like your spouse if you have a joint account);
And credit checks.

Also, your credit report will only keep credit-related information added to it by your creditors for six years. Once six years have passed, details like how much debt you owe, credit repayments, court judgements, insolvency details, credit searches, and closed accounts will be removed.

What information do credit reference agencies not hold?

Credit reference agencies do not hold information that’s not directly related to your credit history. This is what you won’t find on your credit report:

The amount of savings you have in any bank accounts;
Your salary details (even if you entered them on any credit applications);
Student loan information;
Parking, driving or court fine information;
Your criminal history;
Your medical history;
Or information about other people who happen to live with you or at your address, unless you have a “financial connection” with them (for example, if you opened a joint account with them).

In short, CRAs focus on data that’s directly related to your credit history or which is needed to verify your identity, and do not hold other personal information unrelated to your creditworthiness.

How can I see what CRAs have on my credit file?

If you want to see what credit reference agencies have on you, it’s very easy to access your credit report. Here is how you can do it:

You can get a free copy of your credit report from each of the main CRAs once a year. This report is called Statutory Report and you can get this on the CRAs websites.
For more detailed credit reports, you can also sign up to premium subscriptions offered by the CRAs. Experian offers Experian CreditExpert, and Equifax has a similar subscription as well.
If you’re not willing to pay, you can also get your full credit reports via ClearScore and Credit Karma. These won’t include your Experian file but will cover your Equifax and TransUnion files.

Whichever option you choose, regularly checking credit reports is a great idea to make sure that what’s in there is accurate, and to also monitor for any signs of identity theft.