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Consumers confused over credit reports

53% have never checked their credit file

Score sheet

Which? has uncovered widespread misunderstanding about credit reports

Confusion about credit reports is rife among consumers, according to new Which? research.  

Your credit report plays a key role in determining which financial products you can access, and can help safeguard against identity theft by allowing you to pick up on fraudulent applications quickly. 

But more than half (53%) of people we surveyed have never checked their credit report. Our survey of 1,067 people has also revealed widespread confusion about credit reports.

Common credit report misunderstandings

  • Credit blacklist: 77% of those surveyed incorrectly think there is a credit ‘blacklist’ preventing some people from accessing credit. There’s no such thing; each lender will make its own assessment of whether or not to offer credit.
  • Credit reference agencies decide who gets credit: 60% incorrectly think that credit reference agencies (CRAs) – such as Callcredit, Equifax and Experian – make lending decisions. This is understandable as lenders often tell rejected applicants to contact a CRA for further information, but they have no say in whether or not you are granted credit. They simply provide data to lenders who use it to assess your application. 
  • Checking your credit report will damage your credit rating: 36% incorrectly think that regularly checking their report will damage their credit rating. In fact, regularly checking your credit report is a good way to spot any fraudulent activity early.

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How to check your credit report

It’s advisable to check your credit report regularly to ensure the information held is correct and no one has fraudulently opened an account using your details, especially if you’re about to make a new credit application.

Thanks to the Consumer Credit Act 1974, everyone has a legal right to check their credit report from a CRA for just £2. This will provide a snapshot of your credit history but no credit score. 

Equifax and Experian offer unlimited access to your credit report and score for around £15 a month after a 30-day trial period. Clearscore.com (which uses Equifax data) and Noddle.co.uk (part of Callcredit) offer access to your credit report for free.

Alex Neill, Which? director of policy and campaigns, said: ‘Every time you apply for a loan, credit card or mortgage, your credit report will be used to help lenders decide whether your application should be approved. So it’s worth checking your credit report regularly, particularly before you apply for new credit or to check you haven’t been the victim of fraud.’

Find out more: how to bank online safely – protect your identity

Correcting an error on your credit report

If you notice a mistake on your credit report, it’s important to rectify it as soon as possible so it doesn’t negatively impact any future applications you make. 

You can do this by contacting the company that provided the information. If it agrees that an error has been made, your record will be updated accordingly. If it doesn’t, you can add a 200-word ‘notice of correction’ to your report, explaining why you think it shouldn’t be part of your report. Alternatively, you can contact the CRA, which will carry out an investigation on your behalf.

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Which? Limited is an Introducer Appointed Representative of Which? Financial Services Limited, which is authorised and regulated by the Financial Conduct Authority (FRN 527029). Which? Mortgage Advisers and Which? Money Compare are trading names of Which? Financial Services Limited.

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