A Guide to Credit Rating Agencies

A Guide to Credit Rating Agencies

The process of applying for loans or investigating your credit score and available borrowing options can be both frustrating and confusing at times. At Evolution Money, we’ve created this handy guide to credit rating agencies so you’ll know how to check your credit score and what it means to you.

The 3 UK Credit Rating Agencies

There are three main Credit Rating Agencies (CRA’s) in the UK

• Experian
• Equifax
• TransUnion (formerly known as Callcredit)

These CRA’s hold information on peoples credit history in credit reports. Your credit score is a numerical value used to represent your current credit situation. When you apply for a loan or similar borrowing options, the lender will contact one of the above agencies for your credit score and information. Your credit rating may be used to indicate how risky it is to lend to you and to decide whether the lender will accept or refuse your application.

How do Credit Rating Agencies work?

CRA’s are each sent credit information from lenders, including how well you manage the repayments. It’s therefore likely that you don’t just have one credit score, but three from each of the UK agencies.

These scores may differ depending on the amount of information they’ve previously received, such as payment history, debt owed etc. Each CRA using a different scoring system too, for a good credit rating with Experian you must score over 880 out of 999, with Equifax you need 420 out of 700 and TransUnion requires 4 out of 5.

What Information can be found in a Credit Report?

Each of the three main CRAs keeps information on you from personal details to financial history and credit ratings. This information can differ from agency to agency, so it’s a good idea to check out all three of your potential credit reports when looking to improve your credit score.

Usually, your credit rating file will include your basic information such as your full name, date of birth and current address. Any previous credit applications are likely to be visible as well as any financial links to others through joint loans or shared bank accounts.

Credit rating files will also reveal how much money you currently owe to lenders as well as a record of any missed or late repayments, defaults and County Court Judgments (CCJs)s you may have received. If you’ve ever been bankrupt, then this will also be documented.

Although lenders may request information regarding your income, student loan debt, medical history, council tax arrears, driving fines or previous criminal records, none of this can be found on your credit report.

How To Check Your Credit Report

Before applying for a loan or alternative borrowing option, it is a good idea to check your credit file with all three of the main CRAs. When requested, each CRA must provide you with a free copy of your credit report.

There are also partner sites that allow you to view your credit report for free. These include ClearScore who allow you access to Equifax and Credit Karma for TransUnion, and Money Saving Experts Credit Club for Experian.

How Can I Improve My Credit Score?

There is no clear fix to improving your credit score with credit rating agencies, however keeping your credit utilisation low and making your repayments on time and in full, you should be able to build your credit history and improve your credit score over time.

However, there may be some things you can do to improve your credit score. These include registering on the electoral roll, and ensuring there are no mistakes on your credit file. To do this, you’ll need to contact the relevant credit rating agency. Your lender should be able to tell you which agency they carried out the automated check with and work through the information. Even an incorrect address could cause issues with your credit score, so you must check through your details and report any mistakes immediately. You should also be aware of any fraudulent activity on your credit report, for example, loan applications that weren’t made by you.

Repeatedly applying for loans or other borrowing options could reduce your chances of receiving credit.

The higher your credit score, the more likely you’ll be able to benefit from borrowing in the future. You may also be entitled to more competitive rates of interest and larger loan amounts.

Borrowing with a Poor Credit Rating

A less than perfect credit score on your credit rating file can make it difficult to receive a low rate of interest, borrow a larger amount of money or even be accepted for a loan at all. If you’ve got a poor credit history, you should consider contacting the main three credit rating agencies to determine any issues before continuing to apply to lenders.

However, with a Bad Credit Loan from Evolution Money, you may still be able to receive a loan amount ranging from £5,000 to £50,000 regardless of your credit score. We look at more than just your credit report when approving our secured loan applications and consider your unique financial situation too.

If you’re interested in a specifically designed bad credit loan, then contact our qualified secured loan experts on 0161 814 9158 to discuss your requirements and receive a no-obligation quote that won’t affect your credit score.