How to read your credit report (and what lenders actually see)

What does your credit report mean – and what do lenders see when they look at it? Find out in our guide.



When you apply for credit, lenders look at your credit report to make a decision about your financial reliability. This is based on the financial history recorded in the credit report.

Before you apply, it's worth checking your credit report yourself to make sure it's accurate and to get a sense of your eligibility. Checking is free and won't harm your credit score. 

Some aspects of a credit report are easy to understand. But other parts may take a little longer to decode.

Your main aims when checking your credit report will be to check your personal details, review your credit accounts and look for any errors.

If you see a mistake, you can raise a dispute with the lender or credit reference agency (CRA). If the mistake is rectified, it could increase your chances of being accepted for credit.

When lenders run a hard credit check, they look at the last six years of your credit report. This lets them assess your creditworthiness. They base this on all the information in the report.

Understanding your credit report

Let's break down a standard credit report, section by section.

1. Personal information

The first section of your credit report is personal information. It will include your:

• Full name
• Date of birth
• National Insurance number
• Current address
• Past addresses
  
  

It's worth checking this section for errors. That's because incorrect information can lead to mix-ups or suggest that someone has committed fraud by changing your address.

2. Credit accounts

The next section covers your credit accounts – all your credit cards, mortgages, personal loans, bank overdrafts and other finance agreements over the last six years.

Status codes

Lenders use status codes to report your monthly payments. "0" or "OK" means the payments are on time. Codes like 30, 60 or 90 – or, in some systems, 1 to 5 – represent how many days late a payment is.

Credit utilisation

Lenders take note of credit utilisation – how much credit you've accessed. This is because a high level of credit suggests financial unreliability, which could harm your application.

You can work out your credit utilisation ratio by dividing your total outstanding balances by your total credit limits.

If your credit utilisation rate is high, see if you can reduce it in the months leading up to your credit application. This will boost your chances of being approved as lenders see a high utilisation rate as problematic.

3. Public records and collections

The next section covers public records and collections. These are the kinds of financial difficulties that end up on the public record. They might include:

• County court judgments (CCJs)
• Bankruptcy
• Individual voluntary arrangements (IVAs) following bankruptcy
  
  

If these records are inaccurate or don't correspond to your financial history, it's important to raise a dispute. Otherwise, they could seriously impact your chances of getting credit.

4. Credit searches

Next up are credit searches. These are split into two categories: hard searches and soft searches.

Hard searches

Hard searches are marked on your report when you apply for a loan. These are visible to lenders.

If you have too many hard inquiries in a short period, lenders may give you the cold shoulder. This is because they assume you're in financial need and won't be able to repay them.

Soft searches

Soft searches, by contrast, are background checks. These take place when you check your own credit, when your file is checked for pre-approved offers or when you use an eligibility checker.

These are visible to you but not visible to lenders. They don't affect your credit score.

5. Financial associations and the electoral roll

The final section covers financial associations and the electoral roll.

Financial associations

Financial associations are links to a partner or someone else you've borrowed with – typically through a joint account or mortgage. If your partner misses a payment, it will go on both your credit files.

Electoral roll

Your credit report will also record whether you're registered on the electoral roll. Being registered validates your address and strengthens your credit profile.

My credit report is inaccurate. What should I do?

If you spot an error in your credit report, you should immediately raise a dispute. This can be with the CRA (Equifax, Experian or TransUnion) or the lender.

When reading your report, look out for errors relating to:

• Unfamiliar accounts
• Late payments you actually made on time
• Outdated or incorrect personal info
  
  

What do lenders see when they read your credit report?

There's a lot of overlap between what you see and what your lender sees. This includes:

• Personal details
• Whether you're registered on the electoral roll
• Credit accounts, including balances, credit limits and utilisation
• Your repayment history
• Public records
• Hard credit searches
• Financial associations

They'll also see fraud markers. These are warnings recorded by Cifas, the UK's fraud prevention service. These warnings are shared on the National Fraud Database to alert lenders and insurers to financial crime and identity theft.

What do lenders not see?

You may feel that there's too much information available to lenders. There are, however, several pieces of information that a lender doesn't see.

They don't see your salary, employment history or your day-to-day transactions. They also can't see any soft searches you've made, whether through checking your own credit score or via an eligibility checker.

What are lenders looking for in your credit report?

The main thing lenders look for when consulting your credit report is your creditworthiness. In other words, how likely are you to make the repayments they require?

They'll give this information to a CRA, which will put the data into its algorithm. This will spit out a credit score which the lender will then use to make a decision.

It's important to note, however, that loans aren't made based on your credit score alone. If you have a high credit score but no stable income, for instance, you're less likely to get a loan than if you have a poor credit score and a stable income.

How we can help

At Zoomo, we specialise in securing car finance for people with poor credit in Newcastle upon Tyne.

By working with a panel of specialist lenders, we can boast a whopping 96% acceptance rate. That's because these lenders look at how much you can afford right now – not just your credit history.

So, if you need a new set of wheels, why not apply for finance online? It only takes a minute and won't affect your credit score.