There is a lot of confusion surrounding UK credit ratings, credit scores, credit blacklists, credit reports, and credit files. This guide to your credit rating aims to give you the facts you need.

What's in a Credit File

There are two major credit reference agencies in the UK, Equifax and Experian, who maintain credit files on virtually every adult in the country.

Almost all companies that give you credit terms will supply information to one or both of these two credit agencies.

Therefore, your credit file is likely to contain information on all your existing credit and loan arrangements, such as personal loans, mortgages, credit and store cards, bank accounts, etc. In addition, your credit record will contain information on any late or missed payments and the amount of the original debt still outstanding.

The credit reference agency files also contain electoral roll information for your address and court records relating to you. It is this information which allows prospective lenders to confirm your address and also see if you have any outstanding CCJs (County Court Judgements).

Whenever a mortgage lender or other company is assessing an application for credit, they will check the details held on you by Equifax and/or Experian. The reason they do this is because, by law, they are not allowed to request any information about you from any other companies with whom you have a credit agreement.

Also, by contacting one of these two agencies they can gain access to your entire credit history with just a single request rather than having to gather the information from multiple sources.

Each time a lender makes a search of your credit file, that search will be recorded and added to your file, leaving a credit check "footprint". Therefore, it is easy for a prospective lender to see if someone has been "shopping around" for credit, and this in itself could be a deciding factor in whether or not they agree to give you a mortgage.

Your credit file will also include details of other people living at your address if they are financially linked to you, or if the credit reference agencies think they are financially linked to you. In this way, other people's bad credit history can sometimes drag down your credit score. But if you find you are wrongly linked to another individual, you can write to Experian and Equifax and ask them to correct the mistake.

How can I see my credit file and correct any mistakes?

Under the terms of the Data Protection Act, the credit reference agencies Equifax and Experian are required to provide you with a copy of the information they hold on you in return for a small administration fee. At the time of writing (2004) the fee for each agency is