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Getting to GripsWith Your Credit Reportand ScoreHow your credit information canhelp you achieve your goals
Your credit profile iskey to making life happenThink of your credit report and score as a financial passport, a financial MOT or even a financial health check.It plays an important part in life — from enabling everyday purchases to helping you achieve life goals, such as:Getting amobile phonecontractPaying fora holidayBuyinga new carSettingfoot in yourfirst homeIf you’re reading this, chances are you have questions about your credit report and score. You might not evenknow what your credit score is or where to find it. Don’t worry, you’re not alone. In this guide, we aim to answeryour questions and help you understand more.2
Debunking the myths aroundcredit reports and scoresThere are many myths about credit reports and scores, and we want to set the record straight.Myth 1Myth 2Myth 3Myth 4Myth 5There’s a creditblacklistCredit referenceagencies decidewho gets creditBeing refusedcredit damages yourcredit scorePreviousrelationships affectyour credit scoreOnly the financeprovider can decidewhich customers tooffer credit to. Creditreference agenciesjust provide someof the informationlenders use whenmaking the decision,but each financeprovider has theirown individual lendingpolicies.A finance providerwon’t tell creditreference agencieswhether they’veaccepted or refusedyou credit. Thisdoesn’t show onyour credit report.However, you shouldavoid making multiplecredit applications ina short period of time,as this can have animpact.Someone else’s credithistory can onlyaffect your creditapplications if youpreviously made afinancial connectionby having a jointagreement. If you hada financial associationwith a former partneror spouse but nolonger share any jointaccounts or financialconnections, you canformally disassociateyourself so theirfinancial behaviourcannot impact yours.Checking yourcredit scoremultiple times willdamage itThere’s no suchthing. Credit reportsare factual. Financeproviders have theirown policies when itcomes to extendingcredit, and your creditinformation is justone factor when theymake decisions.3Not true. You cancheck your creditscore as often as youlike with no impacton your score. So,no excuses! Time toget familiar with yourcredit report.How to check yourcredit report and scoreYou can request a freestatutory copy of yourcredit file from all UK creditreference agencies. Thiswill provide a snapshot ofyour credit profile at thattime. To monitor your scoreand report regularly, youcan sign up for one of themany free online servicesavailable. You can view yourTransUnion credit report andscore with: Credit Karma,MoneySuperMarket, orTotallyMoney.Note that your credit scorewon’t be the same with allcredit reference agencies,as each has its own scoringsystem and may hold differentinformation about you.
Understanding yourcredit informationMany key decisions you make in life will be impactedby your credit report and score. In our researchacross the UK, we found the majority of people don’tknow how their credit score is used, and almost halfhadn’t checked it in over a year.* The aim of thisguide is to give you a greater understanding of yourcredit report and score and what it means for you.What is my credit reportand how is my score calculated?Your credit report contains your credit history:a record of repayment of debts and your financialstanding. This can include things like yourmonthly credit card payments and mobile phonecontract payments.A credit score is created using a set of ruleswhich take information from your credit report.It can help finance providers assess yourcreditworthiness when they’re reviewing anapplication for finance.It’s important to note there are different types ofcredit scores which can be created by the creditreference agency, lender or other organisationsproviding credit.Your credit report and score are used to helpcredit providers determine how much creditthey’re able to extend. This helps ensure financeproviders don’t lend more than you can affordto pay back. It helps protect you whilst enablingaccess to finance.However, this is just one of the factors used bythe lender. A high credit score doesn’t meanyou’ll be eligible for any product you apply for.Similarly, a low score doesn’t mean you cannotobtain credit. There are different products andfinance providers to suit different needs.For more details read the industry guide:4Understanding your credit informationand how lenders use it*TransUnion’s consumer research of 2000 UK adults carried out May 2019
The power of yourcredit report and scoreYour credit report and score have the power to unlock opportunities. We know from our research there’s a great deal ofuncertainty when it comes to understanding the impacts of your credit report and score. These two elements help paint apicture for lenders regarding your history of managing credit.Your credit report and score ultimately help protect both you and the finance provider. If lenders aren’t able to fullyassess your creditworthiness and ability to repay money borrowed, it may prevent you from getting the right product andlead to financial difficulties.Credit information plays a key role in giving lenders confidence in offering you the credit you need. It’s important toremember your credit report is constantly evolving, and you can take steps to improve your credit score over time if needed.Credit scores provide millions of consumers with a yardstick of their borrowing behaviour and help monitor progresstoward financial goals. Being in control of your credit profile helps you access everyday finance, as well as the funding formajor life purchases — such as a holiday, car or home.“Credit plays an important role in our lives, with many relying on creditto help make some of life’s most important purchases. We know there’sa lack of understanding about credit reports and scores and as one ofthe UK’s leading credit reference agencies, we want to play our part inhelping to change that.“Here at TransUnion, we see your credit report and score as a financialpassport that unlocks your potential to make the best financial decisionsand helps you achieve your goals.”Kelli Fielding, managing director of consumer interactive at TransUnion in the UK5
Taking controlof your credit profileMany people don’t understand the potential power of their credit report and scoreand therefore can’t take full advantage of the positive impact it can have.For example, we found a surprising number of consumers didn’t know applyingfor a mortgage involves a credit check. Knowing how your credit report and scoreare used can put you in the driver’s seat when it comes to applying for finance —helping you achieve your goals.It can also help you make informed decisions when applying for and selectingfinancial products best suited to your needs, such as a loan or credit card.Our research** has found people who self-monitor their credit score are morelikely to open a new credit product, and many experience an increase in their scoreafter taking control of their credit information. Over a fifth of those surveyed saidtheir credit score has helped them achieve a life goal like buying a new house.It’s not just about finance though. Your credit report can help you monitor foridentity fraud, as this might be one of the first places you spot potential signs ofsomeone trying to use your identity in a scam.It can also be used for identity checks by businesses; from online gamblingcompanies wanting to ensure you’re over 18 to rental property agents vettingtenants on behalf of landlords. These checks use information from your credit file— although businesses will only see information relevant to their requirements.6**Internal research carried out by TransUnion, consumer credit data; January to December 2018
What happens if mycredit report is incorrect?Credit reference agencies (CRAs) such as TransUnion collect the majority of information in a credit report fromcredit providers. You should check your credit report regularly to help identify any mistakes.If you have concerns about information contained in your credit report, you can either contact the financeprovider it relates to directly, or contact the CRA and it will take the following action:1357The CRA adds a ‘notice of dispute.’This temporary marker highlightsparticular information beinginvestigated.If the investigation concludesyour credit report is wrong, theinformation in question will bechanged or removed.However, if you still believe the datais inaccurate, you can complain directlyto the lender and add a ‘notice ofcorrection’ to your credit reportgiving your explanation.246Within 28 days, the CRA willinvestigate your query with theappropriate organisations andreport back their findings.If the lender states the data isaccurate, the CRA will remove the‘notice of dispute’ and the informationwill remain.If after raising your complaint, you’renot satisfied with the lender’s response,you can also refer your complaint to theFinancial Ombudsman Service or theInformation Commissioner’s Office.
Our five key tips for building a stronger credit score1Make sure you’re onthe electoral registerand update this if youmove house.82 3 4 5Pay bills on time orearly if possible. We allknow the pressures atthe end of the month,but making sure billsare paid on time is vitalin protecting yourcredit score.Avoid keeping a highbalance on your creditcard. If you do have ahigh balance, ensureregular monthlypayments are made andtry to pay more than theminimum payment.Don’t make multipleapplications for creditin a short space of time.Whilst many creditsearches (such as thoseused for comparisonwebsites) won’t affectyour score, a creditapplication involves afull credit check, leavinga footprint visible toother lenders. Seeingmultiple applicationsover a short periodcan suggest financialdifficulties and couldimpact your score.Close down anyunused credit cards andcancel old agreements;checking your creditreport regularly so youknow it’s up to date.
If you have any questions about your credit report and scoreor need assistance regarding the contents of this guide,please refer to the following: TransUnion Financial Ombudsman Information Commissioner’s Office Action Fraud CifasIf you’re worried about your finances, you can contact the charity StepChangewww.transunion.co.ukCopyright 2020 TransUnion International UK Limited. All Rights Reserved. 731070TransUnion International UK Limited is incorporated and registered in England and Wales with company number 03961870.Registered office: One Park Lane, Leeds, West Yorkshire LS3 1EP. Authorised and regulated by the Financial Conduct Authority.
Your credit report contains your credit history: a record of repayment of debts and your financial standing. This can include things like your monthly credit card payments and mobile phone contract payments. A credit score is created using a set of rules which take information from your credit report. It can help finance providers assess your
