When you apply for credit, lenders will use one of three credit checking services – Experian, Equifax and Callcredit – to check your credit history.
This record shows them how responsible you’ve been when borrowing in the past.
The great news is that each agency offers a free service – Noddle owned by Callcredit, ClearScore by Equifax and CreditMatcher by Experian – so you can check your credit history too.
You’ll be given a credit score when you sign up to a credit checking agency, but which agency gives the best one? Well, truthfully, none of them. The thing is, this score is not something lenders will see. Rather than the score, it’s your credit history that matters.
Can I ignore my score?
Your score can provide you with a useful guideline to how likely it is you’ll be accepted for credit.
When you sign up with Noddle, ClearScore and CreditMatcher, you’ll be given a score based on how positive or negative they consider your credit history to be. So, the lower the score you’re given, the higher the risk they think you are to lenders.
But, it’s important not to get too caught up in the importance of your score. In fact, the score you’re given is unique to that particular credit checking agency. There is no such thing as a ‘universal’ credit score.
Each agency uses their own scoring system, which makes it difficult to pinpoint what an average credit score looks like.
Shall I sign up?
By signing up to a credit-checking agency, you can see what information they hold about you. If you do come across any errors, you can get these amended.
Although your score isn’t the be-all and end-all, it’s useful to see how you’re ranked by the credit checking agencies. If your score increases over time, you know that your credit history is improving.
What’s the difference?
Let’s start with Noddle. When you sign up, you’re given a score out of 710 and a rating out of five. This highlights how much of a risk Noddle thinks you’ll present to a lender.
But rather than your score, it’s your credit history you should pay attention to. When you sign up to a credit reference agency, see whether there are any negative marks on your credit history. After all, these will be visible to lenders.
You’ll be able to access this information on Noddle and ClearScore, but you can’t access your full credit history on CreditMatcher. To do so, you’ll have to upgrade to the fee-paying service.
What is my credit history?
This seems to be a common theme that runs through our blogs, but it’s important you know the ins and outs of what can affect your credit history.
Your credit history shows how well you’ve managed credit in the past. If you’ve previously missed payments, defaulted or ever been issued with a County Court Judgement (CCJ), these will all be highlighted. They will be visible to other lenders and remain on your credit history for six years or so.
If you’ve previously missed payments, lenders may reject your application in fear that you’ll miss payments to them too. This is why it’s a good idea to sign up to a credit checking service yourself, so you can see what lenders see.
If your credit history isn’t in the best shape, don’t worry - there are things that you can do to spruce it up. You can find out more tips on how to improve your credit history in just three months here.
Disclaimer: All information and links are correct at the time of publishing.