Credit reference agencies: Experian

Credit reference agencies: Experian
December 16, 2016 Cheryl Lewis

Did you know one of the UK’s three credit reference agencies, Experian was founded in 1996?

Your credit file, held by Experian, details your borrowing history. Also, lenders can access this information for their lending decisions.

Experian allocates UK consumers with a three-digit credit score. This rating provides financial service providers with an approximation of how creditworthy you are.

Continuing our discussion on credit reference agencies, today we will look at Experian in more detail. Who are they, what do they do and how can they help you?

Introduction to Experian

Experian began providing credit referencing services in the UK in 1996. This makes it a newer agency than Equifax (since 1970), but older than Callcredit which began in 2000.

The Experian group operates in 40 countries worldwide.

The agency holds credit files for people in the UK. Also, the data they record can include credit applications, debts and transactions.

Credit providers can access Experian reports as part of the decision-making process. Yet, before requesting access to your credit file, they must request permission.

Lenders that use Experian

Some lenders use data from just one of the UK’s three credit referencing agencies. Other lenders use data from two, or all three.

Many lenders, credit providers and financial institutions use Experian for their decisions.

This includes:

  • Barclays
  • Co-operative Bank
  • Halifax & Bank of Scotland
  • HSBC
  • Lloyds
  • Royal Bank of Scotland
  • Natwest
  • Nationwide
  • Santander
  • TSB

Credit card providers that use Experian include:

  • American
  • Express
  • Barclaycard
  • Capital One
  • Tesco Bank
  • Vanquis
  • Virgin Money

If you are applying for a mobile phone contract, your Experian credit report may also be checked by other companies. Businesses, such as Carphone Warehouse, Three, O2 or Vodafone.

Various store card applications include an Experian credit file check. As do Wonga loans. Wonga is the UK’s largest provider of short term loans.

Your Experian credit file is also likely to be checked when you apply for a mortgage or finance for a new vehicle.

A vast array of UK credit providers uses Experian, either alone or alongside Callcredit or Equifax.

Checking your Experian file

There are a variety of ways to check the data that Experian holds.

CreditMatcher

CreditMatcher is a free service provided by Experian.

You can access your credit score anytime you like. Yet, the information will only update every 30 days.

Your credit score will give you a sign of the state of your credit file. You can use it to check if you have good, average or bad credit. Also, over time, you can track your score to see if it goes up or down.

Experian credit matcher

Since Experian also acts as a credit broker, you can make loan applications through your CreditMatcher account. A percentage based score tells you how likely you are to receive approval.

A single score does not reflect the complexities of lending decisions. But, it is a good starting point.

Unless you have a reason to worry about your credit score, you may not need more than CreditMatcher. Because the service is well suited to consumers with good or average credit.

CreditExpert

CreditExpert is a paid-for service. It provides a deeper insight into your credit file.

After a 30-day free trial, there is a £14.99 monthly charge.

With CreditExpert, you can access your full credit report. This provides an opportunity to identify any mistakes or inaccuracies.

In most cases, people will find that their credit file is accurate. But inaccuracies can affect your credit score. They may also be an early indicator of fraud.

If you check your full credit report often, you should be able to identify any changes.

Also, you can choose to receive alerts from Experian if there are notable changes to your file. Furthermore, delivery can be via SMS or email.

The CreditExpert service includes real-time updates. You can see your current credit score instead of just relying on data that may be almost 30 days old.

Real-time updates are not usually necessary but might be useful if you plan to apply for credit soon.

Statutory credit report

statutory credit report is a one-off snapshot of your file. It costs £2.

Since Experian’s CreditExpert service costs £14.99, applying for your statutory report is cheaper.  The information on both will be the same. You will need to wait for your statutory report to arrive by post.

experian credit report

If you need to view your Experian file it is likely that applying for your statutory credit report will be the most cost effective option. Yet, this is not the case with other credit referencing agencies.

Callcredit offers Noddle, providing free, unlimited credit file access with updates every 30 days. Thus, it makes Noddle the free alternative to a statutory credit report.

What lenders can use Experian for

Lenders can use Experian to check your credit file

Lenders can use your Experian credit report to access details about your borrowing history. This, of course, is only done with your permission.

They may be able to see any existing credit accounts. This data can include the amount of credit that you have available to use.

Further to this, your file is also likely to include historic data, such as accounts that are now closed. Lenders will be able to see if you pay your debts on time or have defaulted or fallen behind.

With this information, credit providers can assess your risk level. And this will be a factor in their final lending decision.

Lenders can use Experian for identity checks

Your Experian credit report, including electoral roll and address data, can be used for fraud prevention.

Businesses can access your credit file for ID checks. Your data can also be used for age and bank account verification.

If you are paying for a service by Direct Debit, you will probably have agreed to a credit check. They can also be used by gambling websites and other age-restricted retail.

Lenders can use Experian for lifestyle insights

Experian is likely to hold other information about your spending habits and lifestyle.

These records are part of Mosaic. This is an extensive data bank, filled with facts and figures about consumer demographics and behaviours.

Usually, Mosaic information can be used to identify trends. It can also be used to make predictions.

Many people offer information when they fill in online surveys. Your spending habits may also be recorded when you use a debit or credit card.

According to Experian, Mosaic is made up of more than 850 million pieces of information. This covers 49 million people in 26 million households. Furthermore, every household is categorised.

All this information can be provided to businesses. They can use it to improve their marketing campaigns, reaching a more targeted audience.

Other Experian products and services

Values, Money and Me

Experian provides resources for financial education, through Values, Money and Me.

The website features tools for teaching financial management.

Also, there is an emphasis on moral behaviour. And it includes the importance of giving back to the community and doing the right thing.

Furthermore, the website includes quizzes, games and information pages. They teach the difference between ‘want’ and ‘need’. Also, there are interactive budgets, so that young people can learn about savings goals.

Comparison services

Experian offers mortgage, credit card and loan comparisons through its website.

These services are free of charge, yet consumers are usually required to sign up.

Using the CreditMatcher service, you will see a list of results based on your Experian credit score. But you will only see products that you are likely to be approved for.

CreditMatcher will only take into account your score through Experian. Yet, lenders that use other credit reference agencies may not be represented in any comparison search.

Summary: Experian

Experian is a credit referencing agency that operates in the UK, as well as almost 40 other countries.

The agency holds a credit file for a majority of UK individuals over the age of 18.

Your credit report will detail your financial history, going back up to six years. Also, this history can include any open credit accounts, as well as any that were recently closed.

Many lenders and credit providers will check Experian credit reports. These include a lot of the UK’s main banks.

The UK’s leading payday lender, Wonga, makes use of Experian data. As do many credit card providers.

Consumers can access the data held within their credit file. And this is done by paying £14.99 for unlimited online access using CreditExpert. Or, they can pay £2 for a one-off statutory report.

If you only wish to see your credit score, you can access CreditMatcher free of charge.

Furthermore, your Experian credit report features a detailed history of your borrowing. Also, Experian may hold many other pieces of data, including insights into your lifestyle and spending habits.

Finally, your information can be used for identity checks and fraud prevention. As well as lending decisions. Although, you must first give you permission.

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