Banks use lots of info to make their decision whether to lend to you, this includes information held by companies known as credit reference agencies. Yet the info they have is by no means comprehensive.

What banks know about you…

There are three prime sources of information used for scores.

  • The application form.

    Here lenders obtain the crucial details of your salary, family size, reason for the loan and whether you’re a home owner. Ensure you fill the forms in carefully; one slight slip, such as “£2,000” salary rather than “£20,000”, can immediately kibosh any application.

  • Past dealings with the company.

    Companies use any previous dealings with you to help assess your behaviour, though complicated data protection rules can limit which separate units of a company can communicate to each other.

  • Credit reference agency files.

    Experian, Equifax and Callcredit compile information, allowing them to send data on any UK individual to prospective lenders. All lenders use at least one agency when assessing your file. This data comes from three sources…

      Electoral roll information. This is publicly available and contains address and who lives with whom details.

      Court Records. County Court Judgements (CCJs) and Bankruptcies indicate if you have a history of debt problems.

      Financial Data. Banks, building societies and other financial organisations compile details of all your payments and transactions. Around 350 million records a month are tracked including ‘black data’ which is details of any defaults, late payments or problems and ‘white data’ which incorporates how you generally operate the account.

      ‘Black data’ has always been shared by financial companies but now ‘white data’ is shared too, providing there’s customer consent. This means each lender now has access to all data about you from other organisations.

      Now, the ‘white data’ that credit card companies share about you is increasing. From 1 December 2008, Barclaycard, Capital One, GE Money, HBOS and MBNA will share a lot more.

      As well as your available credit, actual debts, and whether you’ve missed repayments, they’ll include the amount that you repay (i.e. if it’s the minimum, or repaying in full) and whether you’ve a promotional deal (plus if you use credit card cash advances, which you NEVER EVER should).

      While overall the aim is to stop irresponsible lending, I suspect lenders are salivating that they’ll now have info to score out those customers who play the system, and constantly shift from 0% to 0% deals.

What banks don’t know about you…

There are many myths about what information is held on credit files. Don’t be fooled, they hold an enormous amount of financial data, but not everything.

The following things are NOT listed on your report:

  • Fines. Any fines you have incurred, for example parking or driving fines. Even though they’re issued by the courts they aren’t ‘credit’ issues so they’re not listed.
  • Savings Accounts. As savings are not a credit product they don’t appear on credit files.
  • Medical History. Medical problems you may have had in the past aren’t listed.
  • Criminal record. No criminal convictions are listed.
  • Child Support Agency. Information from the Child Support Agency is excluded.
  • Information on relatives. Provided you don’t have any joint financial products (see later) there is no information about members of your family who live, or have lived, with you or any other third parties.
  • Student Loans. This information is not currently supplied to credit reference agencies, so whether you have a student loan or not, is not included in your file. The only exception is if you have a County Court Judgment against you for lack of payment, then that can be included.
  • Any defaults or missed payments more than six years ago. The time span of credit files is usually six years, so if something happened more than six years ago it won’t be on your file.