Frequently Asked Questions: Credit Scores & Score Factors

Who are TransUnion?

TransUnion International UK Limited (trading as TransUnion) is a part of TransUnion’s global organisation and is one of the three main Credit Reference Agencies in the UK. We combine data with our suite of software and our analytical capabilities to help businesses and consumers make more informed, confident decisions.

TransUnion has been operating internationally for over 30 years in over 30 countries. We connect businesses and consumers through data, technology and analytics, to help build credit economies worldwide. We’re a key provider of risk and information solutions within the markets we serve.

As a global risk information provider, we strive to use Information for GoodSM to help communities everywhere achieve great things. It's our mission to help people around the world access the opportunities that lead to a higher quality of life, by helping organisations optimise their risk-based decisions, and enabling consumers to understand and manage their personal information.

To find out more information about TransUnion please go to transunion.co.uk/about-us

What is credit scoring?

Credit scoring is often used by lenders to help them assess the risk involved in extending credit facilities to someone. Your credit score is a 3-digit number calculated from all of the credit data a Credit Reference Agency holds about you. Your score will highlight to any potential lenders, including utility and mobile phone providers, your creditworthiness and the likelihood of you making repayments.

Each Credit Reference Agency (CRA) has its own method of calculating a credit score. The TransUnion score is out of 710, but other CRAs are likely to have a different maximum score. Most lenders also generate their own score based on the information in your credit report. A customer with a higher credit score, within the score range, is more likely to have access to a broader range of credit products. As such, being aware of the factors which affect your credit rating can be instrumental in understanding how to boost your score.

Remember a high credit score is not a guarantee that you will be accepted for any product that you apply for, nor does a lower one mean that you will be turned down, as the decision is at the discretion of the product provider. Every credit provider will have their own rules. A number of factors help product providers make lending decisions, including some of the following:

  • Information supplied in your application for the product.
  • Information on your history with credit, this is supplied by a Credit Reference Agency, such as TransUnion.
  • Details about any existing credit accounts you have.
  • Their own policies and rules

What affects your credit score?

Your credit score is constantly changing. Many factors affect how financially attractive you are to lenders. So, if you want to improve your credit rating and score, learning what factors affect it is a good place to start.

Your credit history

Maintaining your payments on any credit you take out will start to build up a positive credit history. Ensure that you don’t exceed the credit limits on any of your credit facilities. It may also be worth closing any accounts that you no longer use.

These will all prove to lenders that you can responsibly borrow money and afford to pay it back.

Past debts and bankruptcies

Records of unpaid debts and bankruptcies stay on your credit file for a minimum of six years.

This will affect your credit score because lenders will consider you a higher risk if you have missed payments before.

Even forgetting to make a few repayments can land you in hot water as lenders do not know that you simply forgot. They may think that you’re not reliable enough to lend money to.

People you are financially linked to

People whom you have a financial connection with can affect your credit rating, as their financial circumstances could affect your ability to make repayments.

Just living with someone doesn’t create a financial connection – you need to have a joint loan, mortgage or bank account to create financial links. If you’re a guarantor for someone else’s loan, their credit rating or score will also affect yours as you are promising to pay their debt if they cannot.

Registering to vote

This is important because it gives the lender proof of your address. Usually, staying at one address and being registered on the Electoral Register at that address shows stability which lenders like to see.

It has nothing to do with whom you vote for but simply being on the Electoral Register can boost your chances of being accepted for credit. Visit https://www.gov.uk/register-to-vote to register today.

How to improve your credit score

If you are working to improve your credit score there are a number of things to consider that can help you improve the way potential lenders assess your creditworthiness. If you are looking to improve your score by a considerable amount, this may take some time, so don’t be disheartened if you don’t see big changes straight away!

No credit score is set in stone and while you can’t wipe your credit score clean straight away, there are ways to improve your credit score over time. We have provided some handy tips below to help you maintain and improve your credit score;

1. Keep up with credit repayments

Firstly, if you want to improve your credit rating, you should keep up with your credit repayments – and pay on time. Missed repayments suggest that you’ve struggled to manage your credit and pose a higher risk to the lender. Missed and late repayments remain on your record for 6 years, affecting your credit applications for a long period of time.

2. Register to vote

Did you know that registering to vote can help improve your credit rating or score?

Lenders use the Electoral Register to check that you live where you say you do – helping to prevent fraud. So, by registering to vote at your current address, you could boost your chances of being accepted for credit.

3. Close unused accounts

Quality over quantity is what counts when you’re trying to improve your credit rating or score. So, aim to have fewer, well-managed credit accounts.

This means closing any accounts you’re not using.

4. Build a credit history

If you have no credit history you won’t be able to prove to lenders that you can maintain your payments and can be trusted to manage your finances sensibly. Having a limited amount of credit and keeping your accounts up to date can help you build up a credit profile. However, you shouldn’t simply apply for credit you don’t need, or take out any credit if you will not be able to repay it.

What is a Credit Reference Agency?

Credit Reference Agencies (sometimes known as CRAs) collate and store information relating to the creditworthiness of almost every adult in the UK. This information is supplied to lenders and other organisations to assist them in establishing an individual’s identity, credit history and current credit commitments.

At some point in our lives nearly all of us apply for credit – be it a car loan, a mortgage, a mobile phone contract or a new credit card. Whenever you apply for credit, the lender will approach a Credit Reference Agency for information about your credit history. Your credit history helps potential lenders to make a fair and responsible decision about whether to give you credit. It will also help them protect themselves against fraudulent applications – a growing problem in the UK. The information on your credit report can even be used during the process of tenant vetting, or new job applications.

How many Credit Reference Agencies are there?

In the UK there are three main Credit Reference Agencies – TransUnion, Equifax and Experian.

They work with building societies, banks, mobile phone companies and other major retailers to help those businesses make a quick and informed decision about whether the person applying for credit is likely to pay it back.

Do Credit Reference Agencies make lending decisions?

No – Credit Reference Agencies will not decide whether you are given credit. That is the lender’s decision.

Credit Reference Agencies are independent organisations holding the information that lenders use to decide whether you should get credit. They play no part in the actual decision-making process and the information they hold is entirely factual.

What information do Credit Reference Agencies hold?

Credit Reference Agencies hold personal information and details about your financial history.

This includes:

  • Your presence on the Electoral Register
  • Any county court judgments made against you
  • Any bankruptcies or insolvencies
  • Your past and current credit agreements, including how much you owe and your repayment history

What are Score Factors?

Score factors provide you with an insight into both the positive and negative elements of your credit report that are currently influencing your Credit Score.

The factors that you see are unique to you and your TransUnion credit report and may include insight into things such as your electoral register status, your utilisation of credit and repayment history.

How are the Score Factors generated?

The score factors are generated by assessing the latest information held on your TransUnion credit report. This is so TransUnion can provide you with a unique set of factors that relate specifically to your individual credit score.

What is a Credit Report?

A credit report contains all the information held on an individual at their address(es) by the Credit Reference Agency.

If you’re over 18 and have taken out a loan, credit card or mobile phone contract, a credit reference agency like TransUnion likely holds a copy of your credit report. It’s important to monitor your financial activity, so checking your report regularly is a good idea.

What information does your Credit Report provide?

Think of your credit report as a kind of financial passport that includes your financial history and credit activity.

Your credit report will provide the following information:

Financial Account Information- This is a record of the financial account information held on you by TransUnion over the last 6 years.

Presence on Electoral Register- Whether or not you’re granted credit can be influenced by your presence on the electoral register as it provides proof of address, so make sure your current and previous addresses are correct.

Financial Associates- The name of any person you are financially connected with will appear on your credit report, such as those with whom you have a joint bank account or have taken out a loan or mortgage with.

Address links and Alias links- these are addresses you have been financially connected with and other names you have been known by on your financial accounts.

How do I access my credit report?

You can get access to copy of your TransUnion credit report for free by clicking here.

What if there's incorrect information on my credit report?

If there is information on your credit report which you believe is incorrect then please raise a dispute against it.

A dispute is an action you can take, within your legal rights, to notify TransUnion about information you believe to be incorrect on your credit report.

When you raise a dispute, TransUnion will investigate the data accuracy with the data provider (e.g. lenders, local council, or the courts) and provide you with an outcome within 28 days, in accordance with our obligations under Section 159 of the Consumer Credit Act 1974.

To view a copy of your TransUnion Credit Report, where you can see the information held on you and if necessary raise a dispute with us to investigate any inaccuracies, please click here.

If you need further information on understanding your TransUnion credit score please contact consumer@transunion.co.uk