Credit Score Basics > How does CIFAS work?

How does CIFAS work?

Wollit Team2 minute read · Updated 29th July 2024

CIFAS, which stands for "Credit Industry Fraud Avoidance System," is a not-for-profit organisation that helps individuals and lenders combat financial crime and serves as the leading fraud prevention service in the UK.

It was established in 1988 and manages the largest fraud database in the UK, allowing its members – mostly banks and other financial institutions – to share data about fraudulent activities and individuals considered high-risk.

How do CIFAS markets work?

CIFAS (also spelled “Cifas”) operates through a membership model, where various financial institutions, including banks, insurers, and credit providers, join to access its fraud prevention services.

Members report incidents of fraud and suspicious activities, which are then stored in the National Fraud Database. This database serves as a resource for members to check potential fraud risks associated with people or businesses applying for credit or financial services.

When a financial institution identifies a potential fraud risk, it can place a marker on the individual’s record in the Cifas database. This marker alerts other members of the potential risk.

Types of CIFAS markers

Cifas markers are crucial in identifying and managing fraud risks. There are several types of markers that can be placed on someone’s record:

Victim of Impersonation Marker. This marker is applied when someone has already been a victim of identity theft, indicating that they should not be penalised for fraudulent activities done in their name – like defaulted loans, for example.
Protective Registration Marker. This is useful when you suspect you might be a victim of fraud and want to alert lenders to be cautious when processing any applications made in your name. It works almost like a credit freeze.
Fraudulent Application Marker: This is placed when a financial institution identifies a fraudulent application made under the individual's name.

These markers can remain on your credit report for up to six years, significantly affecting your ability to secure loans or mortgages – even if your credit score is otherwise good.

How to check if I have a CIFAS marker?

While in most cases you will apply for a Cifas protective marker yourself, it is possible to have a marker and be unaware of it until you apply for credit and get denied.

There are three simple ways to check for a Cifas marker:

Review your credit report: this is by far the easiest method. Some markers, such as the Victim of Impersonation or Protective Registration, may be visible on your credit report. Simply check your credit report for free and see if you have a marker in there.
Make a Data Subject Access Request to Cifas.
Or ask the lender why they refused you credit.

How can I use CIFAS to protect myself?

Placing a Cifas protective marker can be very useful to protect yourself against identity fraud, but it will make credit applications more difficult – including for you.

This is why you should go through a few steps first:

Get your credit report from websites like Experian, ClearScore, and Credit Karma. Look for any unfamiliar accounts or searches that you don’t recognize.
If you notice any suspicious activity, report it immediately to your bank or company that added it. They can help you investigate it.
You can also report the suspicious activity to Action Fraud – the branch of the UK Police that’s in charge of cybercrime.
At this point it’s worth paying for the Protective Registration service through CIFAS. This will tell lenders to run additional checks when you apply for credit, helping to prevent unauthorised attempts.

This protective registration will last for up to two years, and you can safely remove it before that. You can also continue using it, of course, if you notice continued signs of attempted identity theft.