Information guide

CHECK YOUR

CREDIT REPORT

I want to know more

Information guide

CHECK YOUR

CREDIT REPORT

I want to know more

Credit, credit referencing and CRAs

Some basics

Credit is the ability to borrow money or access goods or services with the understanding that you’ll pay later.

Lenders, merchants and service providers (known collectively as creditors) grant credit based on their confidence you can be trusted to pay back what you borrowed, along with any finance charges that may apply.

To the extent that creditors consider you worthy of their trust, you are said to be creditworthy, or to have “good credit.”

Credit referencing supports lenders in the process of making decisions when you apply for credit. It’s a process that involves both lenders and credit reference agencies. Working together, they share financial information about you, to help assess your credit history and judge your ability to repay future credit. This information – which builds your financial credibility – is then kept up to date through regular updates by the lenders to the credit reference agencies.

A credit reference agency (CRA) is an independent organisation that securely holds data about you – including things like your credit applications, accounts, and financial behaviour. In some countries, CRAs are also called credit bureaus.

Credit, credit referencing and CRAs

Some basics

Credit is the ability to borrow money or access goods or services with the understanding that you’ll pay later.

Lenders, merchants and service providers (known collectively as creditors) grant credit based on their confidence you can be trusted to pay back what you borrowed, along with any finance charges that may apply.

To the extent that creditors consider you worthy of their trust, you are said to be creditworthy, or to have “good credit.”

Credit referencing supports lenders in the process of making decisions when you apply for credit. It’s a process that involves both lenders and credit reference agencies. Working together, they share financial information about you, to help assess your credit history and judge your ability to repay future credit. This information – which builds your financial credibility – is then kept up to date through regular updates by the lenders to the credit reference agencies.

A credit reference agency (CRA) is an independent organisation that securely holds data about you – including things like your credit applications, accounts, and financial behaviour. In some countries, CRAs are also called credit bureaus.

CRAs bring important benefits to European consumers

Increasing consumers’ access to affordable credit

by helping credit providers better evaluate borrowers’ financial situation, allowing providers to grant credits they would normally refuse based on incomplete data

Preventing consumers’ over-indebtedness

by ensuring credit providers have a clear picture of the amount of debt held by a borrower so that effective decisions can be taken to avoid burdening borrowers with debts they cannot repay

Supporting sound economic growth and consumers’ well-being

by promoting SME´s growth and improving consumers’ lives while helping to ensure the European economy remains healthy and sound

Improving borrowing discipline

by helping consumers gain a clear picture of their own “financial standing”, enabling responsible financial management and a better management of their finances

CRAs bring important benefits to European consumers

Increasing consumers’ access to affordable credit

by helping credit providers better evaluate borrowers’ financial situation, allowing providers to grant credits they would normally refuse based on incomplete data

Preventing consumers’ over-indebtedness

by ensuring credit providers have a clear picture of the amount of debt held by a borrower so that effective decisions can be taken to avoid burdening borrowers with debts they cannot repay

Supporting sound economic growth and consumers’ well-being

by promoting SME´s growth and improving consumers’ lives while helping to ensure the European economy remains healthy and sound

Improving borrowing discipline

by helping consumers gain a clear picture of their own “financial standing”, enabling responsible financial management and a better management of their finances

Credit reports and credit scores

What you need to know

The information held about your credit history and current financial standing by a credit reference agency is referred to as your credit report. It includes certain personal details and information relating to how much credit you currently have or have been given in the past and how you've managed your repayments.
A credit report includes certain personal details and information relating to your current and previous financial commitments. For example, information on your financial credit agreements e.g. loans, credit cards, mortgages and overdrafts. This includes information on your open and closed credit accounts such as on-time payments but also any missed or late payments.

Credit reference agencies hold or produce other information which can also appear on your credit report. For example, records of searches that organisations may do about you on their database when you apply for credit.
The information in your credit report comes from two major sources:
  • Public information - for example court judgments and insolvency records.
  • Credit history information - Your previous and existing lenders provide information on how you manage your credit, so it includes details of what you owe and whether you've paid on time, or not.
Your credit report can affect future credit applications and it can also affect your current credit agreements.
  • If you apply for new credit, your credit report can affect the decision made by credit provider on what credit product or service you can get, the amount of credit you can obtain, and the price (the interest rate) the lender offers.
  • Lenders can also use your credit report to help decide what your credit limit should be, which they may review on a regular basis.
Your credit report can also affect applications for other products or services which you typically receive up front and pay for afterwards e.g. a utility contract, a mobile phone contract, etc. If you have a poor credit history, this should not affect your access to these services, but the providers - on the basis of the information that they can access from your credit report - may want to discuss another payment method with you (such a pre-paid services, where you pay in advance).
Lenders use the information on your credit report to help them assess whether you are likely to repay what you want to borrow - your credit risk. Lenders must also take account of whether you can afford any more credit at the same time as your existing credit commitments. This is known as affordability and is something lenders should also check.

There are other organisations that may be willing to use some of your credit report for other purposes, such as an employer deciding on a job application, particularly where the job involves significant financial responsibility or a position of trust. In any case, any organisation that wants to look at your credit-related information should tell you in advance, except in very limited cases, such as a police investigation.
No. The information that a credit reference agency based in Germany, for example, holds about a German consumer may be different from the information held by an Italian credit refence agency about an Italian consumer. Lenders in each country may not provide the same information about their borrowers to their respective agencies. European countries have taken different routes for developing the “informational structure” in their credit markets.
A credit score is an estimate of how likely it is that you will repay credit on time in the future. They are typically calculated and used by lenders as a complementary element to help them decide whether to give or refuse credit. Lenders calculate your score by comparing your credit information to past customers with similar credit information. Lenders may also use scores worked out by CRAs.
No. You do not have a single credit score across different lenders or CRAs. Different organisations take different information into account when calculating your credit score and may use different formulas for different products. Credit scores can also be calculated and expressed on different scales, so they are often not directly comparable.
Types of scores you may have include:
  • Lenders ́ scores. Lenders create their own scores. While they may use information obtained from CRAs, they will also use their own information and algorithms to help calculate their internal scores.
  • CRA scores requested by the lender. Lenders may also use scores created by CRAs. These scores may be used to complement their own scores, or they may be the only scores that they use as part of their decision-making process.
  • CRA scores requested by you. Some CRAs may be able to offer you a guide credit score to help you understand how lenders might assess your credit report information.
  • Scores provided by other types of organisations. Many other organisations specialising in credit scoring can provide a score to a lender. These organisations will use data provided by one or more CRAs as a basis for their score. CRAs make sure that these organisations have robust systems to ensure data quality and security before they agree to share data with them.
Credit scores are typically calculated using a method known as a scorecard. A scorecard is a set of rules which take the information from your credit report and use it to produce a score based on that information. Different scorecards work in different ways, such as attaching different levels of importance to the various pieces of information on your credit report. Scorecards allow lenders to make lending decisions in a more consistent, fair, non-discriminatory and objective way, rather than relying solely on individual judgments which might vary from person to person and from day to day.
If your application scores above the pass-mark your application will often be automatically accepted or passed on to the next stage of the lender’s decision-making process. This allows much faster and efficient decision-making, which improves your experience. If you score below this pass-mark, there is a higher probability that your application would be automatically refused by lenders. If your application is refused by an automated system you have the right to ask the lender to review the decision manually. This means that a person will look at your application more closely.
There are many different ways you might be able to improve your credit score. Here are some tips:
  • make sure you repay your credit commitments and regular bills on time if you can;
  • check your free credit report from time to time and report any errors so they can be corrected;
  • try to repay or reduce any outstanding balances you have;
  • avoid borrowing more than 30% of the limit on any of your credit cards if you can; and
  • space out any credit applications you make and always investigate a credit refusal before you apply to another lender.

Consumers

Access to credit reports

    • If you are over 18 and you have taken out credit or borrowed money before, credit reference agencies are likely to hold a credit report on you. In a limited number of European countries e.g. Spain, lenders only provide local credit reference agencies with information pertaining to unfulfilled financial obligations, such as missed or late payments, judgment orders on debts, and other adverse or negative information. So, in those countries, credit reference agencies will not hold any information about you even if you have taken out credit and have repaid on-time.
    • In many European countries, there are more than one credit reference agency. Each would operate its own database and has its own set of data suppliers. While many lenders provide information about their customers’ financial commitments to all credit reference agencies active in a particular country, some do not. As a result, the information that each credit reference holds about you – even within the same country – may be different.
    • You can request your credit history via a basic statutory report for free. You should receive it within one month.
    • It is a good idea to check your report every now and then but the main reasons for checking it include: (i) if you are changing job or moving home; (ii) if you are applying for credit; (iii) if you are worried about ID fraud.
    • Getting your credit report will not hurt your credit score. When you look at your own credit history, that search is not visible to companies on your credit report.
    • Credit reference agencies have to ensure the information in your credit report is accurate and up to date. If you find any inaccurate information on your credit report, you have the right to challenge it. You can ask the credit reference agency to raise a query with the organisation that provided the item of data or you can contact the relevant organisation directly.

Get your credit report

You can ask each credit reference agency to give you a free copy of the credit report they hold about you. This is called your ‘statutory’ credit report. Hover over the country where you have taken out credit and click on the logo of the ACCIS member that provides credit reports in that country. You will be taken to the dedicated area of their website.

Note: ACCIS cannot accept any responsibility or liability for the information provided on the website of its members, or for the use to which it is put to or for any resulting loss.

Access to credit reports across borders

One of the challenges facing anyone moving to another country is financial. You could have a great credit history but no way to leverage that credit to get housing or consumer goods in your new destination. To solve that problem, the ACCIS has actively encouraged the reciprocal exchange of credit information among its members. Since the 1990s, ACCIS members can sign bilateral Credit Bureau Data Exchange (CBDE) agreements on the exchange of information, in order to improve the cross-border accessibility and transferability of your credit data and to support their clients (primarily credit institutions).

In the CBDE model, in order for a lender to get access to your credit data from another country, the lender accesses CRAs located in that country through the CRA with whom it usually works in its own country. As a borrower, you may want to inform your lender that such service may be available with the CRA it uses for creditworthiness assessments.

Helping consumers in the context of Covid-19

Credit referece agencies are alleviating the impact of the COVID-19 crisis on consumers and businesses by taking three types of initiatives:

1. We are recording debt moratoria in a way that does not negatively impact credit files. The fact that credit reports are not negatively impacted by mortgage or other payment holidays means that consumers and businesses’ ability to get credit in the future should not be negatively impacted, other things being equal.

2. We are engaging directly with consumers to remind them about their right to ask for a free copy of their credit report, which should allow them to verify the accuracy of their credit histories in the light of the measures taken during the COVID-19 pandemic.

3. We are offering our data analytics to governments / public authorities, to help them understand, anticipate and respond to the pandemic in order to minimize the financial stress on households and businesses.

Check out the ACCIS pubic position on COVID-19.

Read more

In reporting debt moratoria, CRAs adhere to the principle of

continued full (file) sharing of credit information, including reporting of missed payment data arising due to the crisis, with the necessary safeguards.

This principle has been recommended to policy-makers and regulators by the International Committee on Credit Reporting (ICCR) – the only recognised international standard-setter in this field.

For more information on the credit reporting treatment of credit moratoria:

More resources

Many CRAs have prepared videos and other materials to help you see and understand your credit report, find out how it is used and how you might be able to improve it. Here is a selection: For a full list of ACCIS members click here.

Initiative promoted by

EU Transparency Register: 21868711871-63

Initiative promoted by

EU Transparency Register: 21868711871-63

Some contents in this website are adapted from the Guide “Understanding your credit information and how lenders use it” produced by Experian Limited, Equifax Limited and TransUnion Information Group Limited and are used under the Creative Commons Attribution-ShareAlike 4.0 International License.