They all have the prefix ‘credit’ and all concern your financial behaviour, so really what IS the difference between a credit history, score and report?
In financial terms, these words are banded about quite a lot – when applying for something small like a phone contract to applying for something large like a mortgage. But most of us would struggle to spot how they differ, or even whether they do.
In this article, we call out some of the differences and explain what sets them apart. Starting with credit history.
This is held by the three credit reference agencies in the UK (Experian, Callcredit and Equifax) and is a list of all the credit arrangements you’ve made and how you’ve handled that debt – so any loans, credit cards, overdrafts and so on. It shows what form of credit you used (a loan for example), who it was with (the lender), how long the agreement lasted (and if it’s still ongoing) and whether you made (or make) your repayments on time.
Your credit history also includes any credit searches that have been made in your name (for example, when you’ve tried to apply for credit in the past – regardless of whether this has been approved or not), any County Court Judgements you’ve had and if you’ve ever been insolvent – so, if you’ve been made bankrupt or been on an IVA - or if you’ve been on a Debt Management Plan.
This record goes back six years, and when you apply for credit lenders can access it to help determine how responsible you are as a borrower and whether they’re willing to lend to you. If you always make your repayments on time, this will stand in your favour, but if you’ve missed payments, made lots of applications for credit within a short timeframe or been insolvent, this may stand against you.
You can access you statutory credit history from each of the three credit reference agencies – there is a standard charge of £2.
If your credit history is a record of your credit agreements over the last six or more years, what’s a credit report? Well, it’s actually known as a Statutory Credit Report, and you can request one from any of the credit reference agencies for £2.
This report provides a snapshot of your credit history as it looks at the moment you requested it. It lists personal details like your name and address, whether you’re on the electoral roll and whether you share financial links with anyone. It also shows how much credit you have available to you and how you’ve managed the credit accounts you have.
Lenders can request a credit report when you apply to borrow from them. The report they get is unlikely to be as detailed as the version you can request, as the lender may request specific information based on their own lending criteria.
You can use your credit report to get an idea of how attractive you are to lenders as a potential borrower. But be aware that you can also do this for free by regularly checking your credit history through one of the free services such as ClearScore and Noddle.
Based on both of the above, a credit reference agency or lender can assign you a score based on their own criteria. What that criteria consists of is unique to the lender, but it can help them determine whether or not they should lend to you. However, there is no such thing as a universal credit score.
It all depends on the company you’ve asked what score you’ll be given. You may be given a credit score by the credit reference agency you sign up to for your credit history, but you won’t necessarily get the same figure from a lender – in fact, they may not even mark you out of the same number. And because the borrowing criteria is always unique, a lender wouldn’t tell you what score they’d given you anyway.
The bottom line is, if you’ve been a responsible borrower in the past and always made repayments on time, you will appear more attractive to the lender. If you’ve fallen behind with repayments or appear to have borrowed more than you can afford to repay, you’ll appear less desirable. This may mean you struggle to obtain additional credit, or are offered credit at higher interest rates.
Don’t forget, you don’t have to wait until you apply for credit to check any of the above information. You can either buy your statutory credit history from one of the credit reference agencies, you can sign up to one of their credit report services (but beware that these have a monthly charge after an initial free trial) or you can use a free service such as ClearScore or Noddle.
Disclaimer: All information and links are correct at the time of publishing.