Credit, it is one of those things that everyone seems to want, and once they have credit, they want to protect it. And rightly so. The reality is we don’t really need credit unless you are looking to make a major purchase, such as a property. Technically we can all live without credit if we live on just our wages and save, however with the cost of living these days, that is easier said than done. In addition, emergencies can arise, so we borrow.
When we apply for a loan, credit card, or mortgage, the bank or lender looks at out credit history. Your credit history is to be an accurate picture of who you have had accounts with, and how you have repaid those accounts.
But where does this “credit information” come from??
When a bank or lender looks at your credit report or credit history, where do they get this information??
They get it from the credit bureaus.
The credit bureaus are companies that gather all your details and account information as it is reported to them by banks and lenders, and in general anyone you may owe money to or have an account with. The bureaus then contain the information in a report, your credit report.
The information they gather besides your personal details, is who you have accounts with, the account number, current balances on the accounts, type of account(s), and how the account has been paid.
As this information is reported to the credit bureaus by your creditors and banks, the banks and lenders are also the ones that access this information in making a decision as to grant you a loan or credit. As you can see it is a dual exchange of information.
The credit bureaus are bound to accurately report the information sent to them by the banks and lenders. There can however be some errors in reporting from time-to-time, that is why it is important to review your credit history periodically.
There are three (3) main credit bureaus in the UK:
As mentioned all three credit bureaus are in essence the same, they report account information on your credit report, as it is reported to them by your creditors. Experian is no different.
In some instances a creditor or lender may only report an account to just one or two of the credit bureaus. That is why reviewing all your credit reports or a combined/merged credit report can be important to find any errors.
Experian offers many services to help people not just understand their credit rating, but also help toimprove it. They also have a Q&A section where you can have your questions answered by their Head of Consumer Affairs.
Equifax is the second of the credit bureaus. Both Experian and Equifax are global credit reporting agencies, meaning they also have bureaus to report accounts in America and other countries.
Equifax offers a free credit report and credit score, in addition to help in protecting your identity from being stolen. Identity theft is on the rise and can make obtaining credit in the future very difficult.
Lastly, here in the UK we have Call Credit as the third credit reporting agency.
Call Credit is beginning to offer a service to collection agencies called “Retriever”, which is to help in locating someone with what information you may have about that person. In the collections world this is also know as “skip tracing”.
Call Credit also offer a unique service called “Tenant ID”. This service is to help landlords view the payment history of potential tenants.
So the mystery of where and how your credit history is created and reported has been laid to rest. Your creditors report the accounts to the credit bureaus, and in turn the credit bureaus allow access to that information to a potential lender or creditor.