Credit Score vs Credit Report

One of the biggest misconceptions around mortgages is the importance of your credit score. The content of your credit report is of much greater consequence than a simplified credit score, which cannot quantify the full picture of your credit history.

There are four credit reference agencies (CRA) in the UK: Experian, Equifax, TransUnion and Crediva. CRA are independent organisations which hold personal financial data. Data collected by these agencies allows them to produce a credit report on individuals. These agencies can also produce a score. The most commonly used credit score providers are Experian and Clear Score, the latter uses data provided by the agency Equifax to provide their score.

When it comes to mortgages, lenders are only concerned with the content of your credit report and not your credit score. While there is likely a correlation between third-party credit scores and mortgage acceptance, credit scores can often be misleading due to their volatility. Having a high credit score is no guarantee you’ll be accepted for a mortgage and having a low credit score does not mean you won’t be accepted for a mortgage. A simple credit score cannot provide all the information a mortgage lender wants to know.

So onto the data contained within your credit report…

This includes your name, any name changes, date of birth, address history, electoral roll information and a detailed analysis of your financial history. The latter includes information on your financial associations, accounts, loans, credit cards, utility bills, credit applications, credit history and more.

All the above data is used by lenders to form their own assessment of you with a credit report showing information from at least the last six years. When applying for a mortgage, the data is often inputted into lenders own, internal credit scoring system as well as being analysed in line with their lending criteria to determine if they are happy with your credit status. This forms part of the underwriting process on every mortgage application.

While your credit score can be accessed and tracked free of charge, CRA will typically charge a monthly amount for you to access your credit report. If you’re accessing the data for the first time, for example if you’re wanting to see your report before applying for a mortgage, you can usually do this without paying as part of a free trial period. Just make sure you cancel your subscription before you’re charged!