Confused about your credit score and need help understanding your rights? Resolver's guide to credit score has you covered.
When you’re looking for a loan, it’s worth knowing that all lenders will take your credit score / rating into account. There are a huge number of factors that can affect your credit score. This guide will run through key information concerning credit score, your rights, and what you can do to give yourself the best chance of securing a loan.
How can I see my credit score?
You have a statutory right to view your credit score/report for free (it used to be £2), and you can do so by contacting a credit reference agency. They may offer you a more expensive format of report. We recommend that you go for the free one – it should have all the information you need.
If you feel you have been unfairly denied a loan, you should contact the credit provider to ask which credit agency or agencies they used. The three main credit agencies operating in the UK are; CallCredit, Equifax and Experian.
Some companies offer a free credit report service. This service may allow the company to pass on your details to credit providers. If you don't want to receive communications from these providers, we advise you to take the statutory option (formally £2, but now free!).
The electoral roll
Credit reference agencies use the electoral roll to determine your address and how long you’ve lived there. If a credit reference agency cannot find you on the electoral roll, they may be less likely to give you credit. This means that signing up to vote can make you more eligible for loans!
Bankruptcy stays on your credit file for six years! This will greatly affect your chances of getting a loan or mortgage, even if you have been relieved of bankruptcy.
Credit reference agencies advise lenders on your credit history – this helps the lender make a fair decision concerning your application.
The three main UK credit reference agencies are: Callcredit, Equifax and Experian
Individual Voluntary Arrangement (IVA)
An IVA is an agreement made between you and your creditors that allows you to pay back your debts in manageable amounts. An insolvency practitioner will divide your payments between your creditors. This sort of agreement will stay on your file for six years, even if completed.
County court judgments
All judgments against you are held on your file for six years.
Lenders often share information on your previous credit activity. If you’ve been paying loans back (or not, as the case may be), this will affect your rating.
Live accounts will show on your credit file until it is either settled or closed, after which it will appear for a further six years.
A defaulted account will show on your credit file for six years after you’ve defaulted. When the debt is paid, the entry should be changed to register the fact it is settled.
This means that any previous applications for credit may affect future applications!
If you’ve recently been rejected for a loan, we advise you to consider waiting before applying for another – lenders may count it against you if you make many applications in a short period of time!
If you’ve ever jointly applied for credit with a partner or other associate, their name will show up on your file as a financial association. Your credit score may be affected by the credit score of anyone associated with you. If you are no longer financially connected to a person, you can use Resolver to let credit reference agencies know!
Why have I been rejected for a loan?
Generally, your credit score is used to determine whether you represent a safe investment for lenders. If you have a history of non-repayment, your credit score will reflect this and lenders will be less inclined to lend to you in future. Conversely, if you have a perfect credit score and pay back debts in full every month, lenders may be unwilling to lend to you as you won’t represent an opportunity for profit. If, however, you feel like you don’t match either of these descriptions, we recommend you check your credit score as soon as possible! There may be mistakes in your report, or you may have been the victim of fraud! See below for more details.
What can I do about incorrect information on my credit report?
If you’ve spotted some incorrect information on your credit report, you should use Resolver to contact one of the credit agencies to get it corrected! If the information relates to an entry by a company such as your loan provider, the credit agency might ask you to contact that company directly.
Any updates made by the company that had placed the entry on your credit file must occur within 28 days of the issue being resolved on their case files.
If you still can’t resolve the issue, you should escalate your case to the credit reference agency via Resolver. If it is still not resolved, it should be escalated to the Financial Ombudsman Service.
Try and check your credit report at least once a year! This will let you make sure that you get any mistakes corrected as soon as possible, avoiding problems in the future!
How do I change my details on my credit report?
If you find that your details are incorrect on your credit report (or that your details have changed for any reason), you can use to quickly and easily amend your personal details. Use our free tool below to get your details updated!
If you find that a credit reference agency has not replied within 28 days, Resolver can escalate your case to the Information Commissioner.
If you have recently changed your name due to marriage, you may want to consider using Resolver to contact the credit reference agencies to set up aliases linking your new name with your old name. This is because your new name may have very little on the record, meaning your credit score may suffer.
How do I cancel a credit score subscription?
If you wish to cancel a credit score subscription service, you should use Resolver to write to the company. Your ability to terminate will depend on the terms and conditions that you signed up to. Usually these services provide you with a 30-day free trial, so you can cancel any time during those 30 days without incurring any charges. If you are not provided with a free trial, under consumer regulations you still have the right to cancel for the first 14 days after you sign up to the service.
If you are outside the free trial, or the 14-day period has passed, your ability to cancel will depend on the terms and conditions of your contract. Typically you can expect this to require you to give one month’s notice to cancel, but you should contact the firm via resolver to ensure that you keep a complete and accurate record.
I was incorrectly sold CreditExpert by Experian!
Starting in January 2011, the charge for Experian’s CreditExpert credit monitoring service was raised from £7.99 per month to £14.99; it was also amended to automatically include identity fraud insurance. After the 30-day free trial was over, many consumers continued paying the £14.99 monthly charge – however, it was not clearly explained to them that the insurance part of the service could be cancelled.
Moneysavingexpert.com believes that the product was sold unfairly, as credit reporting and identity insurance are different products and should therefore not be sold together without consumers receiving sufficient explanation of how to cancel.
Value added service sold as a bundle
According to Experian’s terms and conditions, the insurance product only covered fees that you could have racked up when putting your house back in order if you had fallen victim to ID fraud; these could include legal fees, the cost of replacing documents and the cost of making phone calls. It didn't cover loss from the fraud itself.
Customers who signed up to Experian CreditExpert from January 2011 to July 2014 could only subscribe to the service if they also took out the ID fraud expenses insurance policy. As Experian told Moneysavingexpert.com: "(Customers) were unable to proceed if they did not accept the insurance terms and conditions."
How much are you entitled to?
Despite the cover costing £6.40, Experian has offered some users £5 back per month, claiming that this is the wholesale value of the product.
You should ask for 8% statutory (non-compounded) interest on the sum that you get back; this is the amount that a court would award if it had to adjudicate. For example, if you had the product from January 2011 until July 2014, you could be entitled to £215 compensation and a further £17.20 in interest.
What can I do about rude staff?
If you have engaged with a credit agency’s staff and they were rude or impolite, you should raise the issue via resolver. All good companies care about their reputation and customer satisfaction, so will want to know about your experience.
Credit score complaints tool
You can raise issues with 12 companies in Credit rating services
Key companies include: