The Facts: What Rating Agencies Do & Don't Know
Credit rating agencies get their information about you from the banks and the electoral roll as well as the courts. They can find an awful lot about you by using these methods, but there is also a huge chunk about you that you credit report does not show and your credit agency will not be able to access.
What a Lender Looks For on a ReportWhen looking at your credit report the most important thing a lender looks for is whether you have missed any payments on any loans or bills you have. Any defaults that you have on your credit history will be classed as “black data” and show any late payments.
Lenders can also see what is referred to as “white data” which shows how you use the account. Credit reference agencies have access to “black data” automatically, but you will need to give your consent for them to look at your “white data”.White data can include information such as whether you pay back a minimum payment or how you use your credit for example.
What Your Credit Report Does Not ShowIf you missed a payment on a credit card more than six years ago it will not show on your report. Only defaults that have occurred in the past six years will be shown to banks and lenders.
Any fines you have incurred such as a parking ticket or a driving offence will not show up on your report as they are not directly linked to your financial situation.
Your criminal record will also not appear, whether you have committed a criminal offence in your past is not relevant to whether you can pay back a loan, nor will your medical history, your health is not relevant when it comes to paying back your debt, so it is not included in your credit report.
If one of your relatives has been declared bankrupt this will not show up on your credit report, unless you have a joint account with them or share any financial responsibilities.
Savings and student loans will also not appear on your report, so if you have a secret stash hidden away it will not show up on your credit report, similarly if you went to university and built up a hefty student loan bill it will not show up as a debt on your credit report.
What you earn is also not taken into account on your credit report.
What is Included in Your Credit ReportThe first things on your credit report will be the basics about yourself, including name, address where you live and your age.
Loans and mortgage payments will also be included, your credit report will show any missed payments you have had in the last six years and how many there have been.All the details of any loans you have taken out will be included in the report, such as when you took out the loan, your monthly payments and when you will finish paying the loan.
Your credit report will also contain details of any shared accounts your have and how these are operating.Your actual credit rating will also be contained in your report, the higher your rating the more willing a lender will normally be to lend to you.
People often have a misconception that their credit report contains their life history, but that is not the case. Your credit rating may not be as bad as you think once you know what it contains.