Three credit reference agencies, three versions of your credit file

Most people only think about their credit file when an application is turned down. By then the reason is buried in a record they have never read. Yet the file is not secret, and reading it costs nothing. It is simply a list of facts about how you have handled credit and bills, compiled from what lenders and other companies report.

In the UK, three main credit reference agencies keep these records: Experian, Equifax and TransUnion. Lenders do not all report to all three, and they do not all search all three, so the files can differ in small but important ways.

What a credit file contains

A credit file is a factual record, not a judgement. It typically shows:

• your name, date of birth and current and previous addresses;
• credit accounts such as loans, credit cards, mortgages, mobile phone contracts and some utility accounts, with balances, limits and a month-by-month payment history;
• missed payments, defaults, County Court Judgments and insolvency records;
• whether you are on the electoral register at your address;
• financial associations, meaning people you have shared credit with, such as a joint account or joint mortgage;
• searches made by companies when you applied for credit.

What it does not contain is just as useful to know. Your income, savings, medical history and criminal record are not on it. Nor is a single score that every lender uses: the scores shown by agencies and apps are each company’s own estimate, and lenders apply their own criteria.

Your right to a free copy

Under UK data protection law you have the right to see the personal data an organisation holds about you, free of charge in most cases. Credit reference agencies are no exception: each of the three offers a free statutory credit report showing the information it holds. This is separate from paid subscriptions and from free score apps, which show a version of one or more agencies’ data in their own format.

Because the three files can differ, checking all three is the only way to see the whole picture. A lender reporting a missed payment to one agency but not another, or an old address linked to one file but not the others, would never show up on a single report.

How long information stays

Most entries, including defaults and settled or unsettled County Court Judgments in England and Wales, usually stay on a credit file for six years and then drop off. A default stays for six years from the date it was registered, even if you repay the debt sooner, although the file should then show it as satisfied. Closed accounts in good standing also fall away after a few years, which is why someone who has not borrowed for a long time can have a thin file.

A quick check, line by line

• Is every address one you have actually lived at?
• Do you recognise every account, including old store cards and phone contracts?
• Do balances and payment histories look right, month by month?
• Are you linked to anyone you no longer share finances with?
• Are there searches you do not recognise? These can be an early sign that someone has applied for credit in your name.

Hard searches, soft searches and checking your own file

Companies leave a record each time they search your file. A hard search is recorded when you actually apply for credit and is visible to other lenders; several in a short period can make lenders cautious. A soft search, such as an eligibility check or a search by an existing lender, is visible only to you. Looking at your own file is a soft search, so it does not affect how lenders see you.

How to correct a mistake

If something is wrong, the quickest fix is usually with the company that reported it, because the agency needs that company’s agreement to change its data. You can also raise a dispute with the agency itself, which will check with the lender. If a record is about someone else, for example a relative with a similar name, ask the agency to remove it; if you are wrongly linked to someone through a financial association, you can ask for a disassociation.

The Consumer Credit Act 1974 adds a formal route. Under section 159, after you have received your file you can give the agency notice that an entry is wrong and likely to harm you. The agency then has 28 days to tell you whether it has removed the entry, amended it or taken no action. If the entry stays, you can ask the agency to add a notice of correction of up to 200 words, written by you, which lenders will see alongside the entry. If the agency thinks the notice is unsuitable, the matter can be referred to the data protection regulator.

Simplified from the statute. In practice, most errors are put right informally by the lender or agency before these steps are needed.

Who this matters for

A check is particularly worthwhile a few months before a big application, such as a remortgage when a fixed-rate deal comes to an end; after a separation or bereavement, when joint accounts and financial associations may need updating; after moving house, to make sure the new address is linked and you are on the electoral register; and for anyone who has not borrowed for years and wants to know how thin their file has become. An annual look is also a simple safeguard against identity fraud.

Keep bills and credit payments up to date, because missed Direct Debit payments for things like phone contracts can be reported too.

The short version

There are three credit files, not one, and you are entitled to see each of them free. Most entries stay for six years. Mistakes are best fixed with the lender that reported them, and the law gives you a formal route to have an entry reviewed or to add a 200-word notice of correction. Reading all three files once a year, and before any big application, takes an evening and removes a lot of guesswork.