Credit Reference Files Introduction

The reason I’ve included a section on credit reference files is because you’re going to need to know the extent of the damage caused by your gambling debt or debt in general. It’s also a good place to start because paying attention to what’s recorded on it should form part of a long-term strategy to become debt free. Fortunately, finding this information out is free and once you’re armed with it you can begin to fix the problem. Don’t expect results with it overnight as this will take time. Your credit score may well get worse before it gets better but it WILL get better if you’re serious about stopping gambling. It could well be the case that at the moment your score will be poor but don’t be disheartened as when it starts to improve you can use it to your advantage in order to become debt free quicker.

Your Credit Reference File

Your credit reference file is a chunk of data held by a Credit Reference Agency, about you and anyone else you’re financially linked to. When you apply for credit, this file is consulted (often automatically) and a decision is made as to whether or not you are extended the credit you want. Lending companies such as credit cards, loan companies or banks will usually make use of a scoring system. If your score isn’t high enough you will be declined credit. In some cases you may still be accepted for the product you’ve applied for but at a higher interest rate than the one that was advertised. There is no set scoring system and it can vary significantly between lenders. You may think you have a good score and still get declined, as there simply isn’t a hard and fast rule here.

Credit Reference Agencies

Over the last few years, you may have seen numerous adverts for companies that allow you to check your credit score for free. There are 3 main credit reference agencies in the UK and different lenders may use one or a combination of all of them to share or obtain your financial data before making a decision on whether or not to offer you credit. Bear in mind though that regardless of the score you see, it is the financial company that scores you according to their own criteria. This means your score is simply a guide. That being said, the credit scores you see are generally a very good indication of your chances of obtaining credit. Remember also that as well as obtaining information from your credit reference agency file, lenders also share it. This means that any accounts you already have will be documented with the relevant credit reference agency. The 3 main credit reference agencies in the UK are:

Experian

Equifax

TransUnion (Formally Call Credit)

third Party Websites

Experian, Equifax and TransUnion are the actual agencies but the free checks you may see advertised are often through third party companies. For example, Clear Score is powered by Equifax and Credit Karma takes its data from TransUnion. Experian also runs it’s own checking site called Credit Expert.

If you sign up to a few of these sites, you’ll notice that your credit score differs between each one. Your score will be a number and the higher the number, the better your score. For a little more clarity, some will give a definition of your score ranging from very poor to excellent. Again this may differ between sites and agencies. A good thing about Credit Karma and Clear Score is that they will also present you with offers based on your score. Not only that, they will give will give you a % chance of approval for each offer. This is usually highly accurate and may come in useful for when you look at strategies for becoming debt free in the future. The images below highlight the potential differences in scores between the 3 websites. These scores are all for the same person at the same time.