Credit reports: who uses the information available?

Representative Example

Total amount of credit £80, duration of the agreement 29 days, rate of interest 292% per annum (fixed), total amount payable (in one repayment) £98.56. Representative 1281.8% APR.

Having explored what a credit report is, how it is compiled and who compiles it, the natural next step is to consider which organisations, third-parties and individuals have access to and have uses for, the information available in your credit report.

Current creditors e.g. a credit card, an online loan or any other form of credit provider, can use the information available within a credit report to decide whether they wish to maintain or amend the terms of a credit agreement. They may use this information to increase or decrease the level of interest currently accruing on an account or add or remove a late fee charge. For example, credit card providers may decide to increase or reduce one's credit limit depending on the information obtained from their credit report.

Supporting a lending decision

Potential creditors are also likely to access the information available in one's credit report. When applying with any credit provider it is likely that the lending body will access the necessary information from a potential customer's credit report to support their decision-making process. This includes their decision to provide credit to the individual in question and the level of interest and fees to charge to that particular debt. Fundamentally, the information contained within a credit report gives creditors an indication of the risk level associated with entering an agreement with a potential customer.


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Mortgage and housing debt providers are some of the primary users of credit reports in the UK. Due to the higher credit sums involved, such lenders usually adopt a more risk-assessed approach during their decision-making process. Mortgage requests usually involve rigorous screening processes including minimum annual income requirements, maximum total debt ceilings and positive previous repayment records. This results in most individuals requesting for and monitoring their credit reports prior to making any sort of mortgage application.

Credit reports and insurance policies

When creating an insurance policy for any given individual, insurance agencies consider the information available in a credit report to establish the balance between providing suitable coverage for the individual's needs, whilst maintaining a risk level they consider to be within an acceptable range. Positive indicators, such as a good credit score and relatively low levels of late or missed payments, may prompt the insurance provider to offer more affordable coverage. On the other hand, negative information contained within a credit report can have the consequence of the individual in question having to pay higher insurance rates. This being said, insurance companies take other factors into account as well. These may include an individual's location, crime rates in the area they live in, any accidents they were involved in in the past, as well as any medical history.

Here are additional examples of different creditors, other financial and non-financial institutions or individuals that can access and use the information available in a credit report.

Landlords and property managers, such as estate agencies, take your credit report into account when assessing whether an individual is suitable to rent or buy a property. Factors taken into account include criminal convictions as well as outstanding mortgage balances on any current or previously owned properties. Landlords may also use this information to determine whether a potential renter is likely to keep up with monthly repayments.

In cases of individuals who are indebted, this debt may be passed on to a third-party debt collection agency. These agencies utilise credit report data in order to determine when repayments are likely to be received or to determine a suitable repayment plan for the individual in question to pay off their debt.

In an effort to avoid taking on potentially high-risk customers, utility suppliers and mobile network providers can access such individual's credit reports to decide whether they are a suitable customer for their specific services. In some cases, a deposit may be required to be paid by the customer before any services are provided. This acts as a safety net in case they default on any payments. Furthermore, changes could be made to the terms and conditions of a contract, based on the information found in the credit report.

Credit files may also be accessed by local authorities and other government bodies, for example when determining the eligibility of an individual for certain government services or benefits such as child benefits, disability benefits or low-income related support. In other cases, information retrieved from someone's credit report could play a role in them being granted residency or citizenship.

A range of institutions and bodies access and utilise the information found on credit reports to make various decisions related to the provision of credit or other services. They may access this data regularly or sporadically, depending on their requirements. However, companies and creditors need an individual's consent in order to access their credit report and use the data contained within. This is in accordance with the Data Protection Act (DPA) which states that companies and lenders do not have the permission to process your personal data without a legitimate reason or prior consent. Moreover, they are required to inform any individual as to how their data will be used and what data they hold about them. Should they fail to do so, they may risk being in breach of the Data Protection Act, enabling the person in question to issue a complaint or take further legal action. The terms and conditions of a credit agreement usually set out for which purpose the data on a credit report is required.

The Consumer Credit Act of 2006 is intended to protect a consumer's credit information. The Act was established with the purpose of ensuring that regulation of consumer credit agreements is subject to exemptions where necessary, thereby allowing for license agreements to take place in the context of consumer credit. Consumers are therefore enabled to challenge the actions of creditors if they disagree with them. Such complaints can be made through the Financial Ombudsman Service (FOS), as well as other institutions dealing with claims and complaints.