What are credit reference agencies?
Credit reference agencies provide lenders with information about potential borrowers, which they then use to make lending decisions. The information shared may include information about your previous credit history. They hold certain information about most adults in the UK. This information is called your credit reference file or credit report. The three main consumer credit reference agencies in the UK are: Callcredit, Equifax and Experian.
A credit reference agency is an organisation that stores and puts together financial and publicly available information about almost every adult in the UK. A credit reference agency does not decide whether credit should be given – it simply provides factual information that helps the lender decide whether to accept an application. The information provided by a credit reference agency falls into two categories – public information and credit account information. The public information consists of the Electoral Register (from local authorities), which is used to help identification, county court judgements (from the Registry Trust Ltd, which is the official body that records county court judgements) and bankruptcies (from the official London and Scottish Gazettes). The credit account information is held by credit reference agencies on behalf of lenders. Most of the UK’s major credit-granting institutions store information about the credit agreements they have with their customers with a
Credit reference agencies provide factual information on details of credit agreements, arrears and defaults on credit; records on county court judgments and bankruptcies; and electoral role (also known as the voters roll) information of the borrower. They also retain information relating to the previous and existing records of the customers. These agencies do not keep “blacklists”, nor do they give any opinion about whether or not an unsecured loan should be granted to a particular borrower. The main credit reference agencies in the UK are Experian Limited and Equifax Plc. Why are applications on unsecured loans being turned down? Once the Credit reference agencies give their report on a particular customer, the lending institution makes its own calculations on the basis of the credit report and their own criteria. Unsecured loans can be rejected if the borrower- • has a poor credit score • has too many arrears and defaults in his past repayment record • has done fraud by providing wro
