How your credit report is put together

Your credit report is put together by a credit reference agency. They get most of your information from banks and lenders who’ve had financial dealings with you in the past.

We’ve broken the process down to show you the five stages of how your credit report is compiled.

When you take out a line of credit this gets recorded by the lender for their records. They’ll make a note of the kind of credit you have and how much credit they’ve given to you. This could be the size of your loan, the limit on your credit card or maybe the size of your overdraft.

You don’t even have to take out credit for a lender to make a note of you. They’ll also make a note of anyone who applies for credit – whether you're accepted or rejected (more on this later).

As you go about your daily life and start using the credit you have, this will also be logged by the lender. Lenders make a note every time you pay a bill. They’ll record information like whether you pay them back on time, how much you pay, and if you ever miss a payment.

Lenders then report the information they have on their customers to companies called credit reference agencies (CRAs).

There are three credit reference agencies in the UK: Equifax, Experian and Callcredit. Some lenders will share their data with all three CRAs, some with only one or two. (And some may not share information with any).

The credit reference agency acts like a central vault for all this personal information. They collect all the information that’s shared with them and match it up to each person.

The CRA can then put all of the information they have on you into one record. This is known as your credit report.

Once a credit reference agency has your credit information from lenders, they combine it with other information about you. This helps to verify your identity and make sure the information gets matched to the right person.

This includes:

• Current and former addresses. This will be supplied by the council from information on their electoral roll.

• Financial arrangements with others such as a joint mortgage.

• Unusual financial behaviours that may appear fraudulent, such as large amounts of money regularly coming and going from a credit card.

• Public records, like county court judgments, bankruptcies or defaulted debts.

It doesn’t include:

• a breakdown of what you’re buying or paying for
• current account information (unless you have an overdraft)
• savings account information
• your salary
• student loans
• parking or driving fines
• council tax arrears
• criminal record
• medical history or information about gender or ethnicity

Once there's enough information in your credit report, the credit reference agency will calculate a credit score for you. This is a three-digit number that sums up how all the information in your credit report might be seen by a lender. The higher the score, the more positively lenders are likely to view your report.

As all the information from different lenders is stored in one place (in your credit report), it makes it easier for a prospective lender to understand your borrowing habits.

Don’t worry, companies and individuals can’t just check your report whenever they feel like it. They need permission from you, which is normally part of the process when you apply for credit.

If you do apply for credit, the lender will ask the credit reference agency to share your credit report with them. This is known as a credit check or a 'hard-search'. (Hard searches get added to your credit report, as you'll read about in stage 5).

Lenders look at all the information that’s in your report in order to decide whether or not to lend to you, and what interest rates to offer. By looking at your report, lenders can get an idea of how you’ve handled credit in the past. This helps them to get an idea of how you might handle any future credit.

Lenders will also look at information that isn’t in your credit report, such as your salary or outgoings. Whether or not you are accepted for the credit product is down to the lender and their own unique criteria.

Once your credit report has been created, it will continue to be updated for as long as you use credit.

Lenders continue to keep track of what their customers are doing (stage one) and they’ll carry on sharing this information with credit reference agencies (stage two).

Your credit report is usually updated with new information every month. This means your credit report (and your score) could also change every month.

Information stays on your report for up to six years, and after that it will tend to drop off.

You can check your Equifax credit report for free using ClearScore. It’s also worth checking your report with the other credit reference agencies to get a full picture of your credit history.