What is a Credit Reference Agency?

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Throughout your life there will be times when you may need to apply for credit, from getting a mobile phone contract to having a mortgage. When you apply for credit from an organisation, it will receive your credit information from a Credit Reference Agency (CRA). This is how they work out if giving you credit, which you will need to pay back over a period of time, presents a risk.

However, a CRA can also show you how your credit rating appears using a credit score. You can also see different parts of your credit history that might be affecting your credit negatively.

How do Credit Reference Agencies work?

Information is gathered by CRAs to build a credit report, and much of this is from publicly available information. For example, appearing on the electoral register can be added to your credit report, potentially helping to improve your credit score as it can help verify your identity. Other information such as credit card, loan and mortgage repayment are also included. CRAs also provide these details when lenders make a hard credit search.

How can a Credit Reference Agency help you?

By signing up to a Credit Reference Agency’s services, you can gain insight into ways you can improve your credit score. For example, Equifax Report & Score can show you where there might be gaps in your credit history, such as previous addresses, or whether or not you’re on the electoral register.

A Credit Reference Agency can help by clearly showing this information, and where there might be gaps. By being able to see where these gaps are, and adding these details, this gives a clearer picture of your credit score.

Who Decides if You’re Approved for Credit?

While a Credit Reference Agency can provide credit information to a lender, it is down to the lender themselves whether they agree to offer credit. This can be down to several different reasons, and your credit report may only be one part of how they make their decision.

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This article was written on 1st March 2022; all information was correct at the time of writing.

Visit our Knowledge Centre for more on managing credit and what we do as a credit reference agency.

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