Credit Checks: What Do They Check

Banks and lenders in the UK use two major Credit Reference Agencies. They are Experian and Equifax. They record and keep track of all financial dealings of individuals in the UK. This article explains what information they check during credit checks.

What is a credit check?

A credit check is something a company may do if they want to know about your financial history and behaviour. Companies don’t need written permission to do this, but they do need a legitimate reason for credit checks. Example of companies who do credit checks include banks, credit providers, utility suppliers and employers. For more information on credit checks, please see our article do credit checks affect your credit score.

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What information is held by the Credit Reference Agencies?

One of the two main Credit Reference Agencies in the UK is Experian. Information collected by Experian include the following:

  • Postcode Address File and Address Linking – for address verification and fraud prevention
  • Electoral Register – for ID authentication
  • Aliases and Associations – for tracing, ID authentication
  • Public Information – to include the use of County Court Judgments, bankruptcies, administration orders and IVA’s
  • Credit Applications – are a record of previous searches made as the result of credit applications, regardless of the outcome of the applications
  • CIFAS – the UK’s Fraud Prevention Service provide information on any potentially fraudulent dealings
  • Possessions Register – Or what should be called a Repossession register
  • Redirect Check ™ File – This one even surprised us. It’s s database of addresses from which people have recently set up a postal redirection
  • GAIN – Gain stands for the Gone Away Information Network. It stores information about people who after being in arrears leave with leaving a forwarding address
  • Mortality Data – Keeping a record of who has died is important in preventing people from using a dead person’s name and details to raise finance.
  • Previous applications – A pool of shared previous applications are cross-referenced to check for consistencies

Please note, a credit rating is established the first time a lender reports a credit account for that individual. If a minor (under 18) has a credit record then credit checking companies cannot disclose that information to a third party enquirer until the individual is 18, at which point the credit history becomes accessible.

Are credit checks free?

Experian and Equifax do a free trial so you can apply for your score and then just before the trial period is about to come to an end you can call and ask that you do not want to renew the membership after this trial period ends. This is normally a 30 day trial period.

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Can I get a credit check on my property?

Credit reference agency files are about individuals and how they manage their personal, and joint, commitments. A property does not have a credit reference agency file so there is nothing to check. As people can move many times their own personal file may show a history of the different addresses they have lived in. If you are approached by anyone seeking information, or payment, for debts owed by someone who does not live at your address then you can let them know that this is the case.

For more information, please see our article on what affects your credit rating.

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