5 Myths About Credit Reports Debunked

Your credit report contains traces of your financial life. Lenders use it to make decisions big and small – but do you know what’s in it?

In July 2024, we surveyed 4,193 members of the public and asked them to distinguish fact from fiction on credit reports. The results revealed knowledge gaps and misconceptions across the board.

Here, we uncover five common myths about credit reports and explain what you need to know to understand your credit score.

1. You only have one credit report

65% of our survey respondents didn’t know they had more than one credit report.

You don’t have a centralized report and assessment, which you access through different companies. Instead, you have different credit reports from each credit reporting agency (CRA).

There are three main CRAs: Experian, Equifax and TransUnion. Each of these companies collects information about you from banks and lenders, as well as from sources such as electoral rolls and the Land Registry.

When you apply for any type of loan – e.g. mortgageA credit cardor even a telephone contract, the lender will likely take information from one of these providers to make a lending decision.

Some lenders, including several large banks, use data from more than one agency.

70% of people we surveyed who had their reports reviewed in the last five years did so with only one service provider. But if you only check one report, you may end up using a different agency than the one the lender used when applying for the loan.

2. Checking your credit report costs money.

Before 2018, there was a £2 fee to check your statutory credit report, and 41% of people we surveyed didn’t know it was now free to check your report.

You have the right to access your statutory credit report free of charge from each of the credit reporting agencies (CRAs). Here’s how to do it:

CRAs often recommend that you sign up for their paid services, which provide a report and score, as well as tips on how to improve it. They don’t always advertise the free white paper so prominently.

Your official credit report doesn’t come with a score, but some services like ClearScore and Credit Karma let you check your score for free.

These companies make money by acting as brokers that connect users to products such as credit cards or loans. When using these services, remember that signing up for more credit is not always in your best interest.

Find out more: how to check your credit history for free

3. Checking your report hurts your score

Checking your credit reports regularly is a good way to stay on top of any errors or a negative impact – but 45% of people didn’t know that you can check your report as often as you want without any negative impact on your score.

However, what will hurt your score is applying for many credit products.

When you apply for credit, the lender will conduct a “hard search” on your credit file to review your information, and this search will remain on your report for two years. A complex search will have a small negative impact on your ranking, but many searches over a short period of time will have a more significant impact.

If you’ve recently applied for a loan, consider taking six months off before applying for another one if you can. Lenders often view consecutive credit requests as a sign that someone is in financial trouble and may be having a hard time paying off debts.

Find out more: What is a credit report?

4. Current bills and salary included.

40% of the people we surveyed believed that the amount of money in your checking account would be included on your credit report.

In fact, your report will only show credit account balances, such as your credit card balance or your utility provider account.

Likewise, 45% of people thought your salary was included, but credit reporting agencies don’t have this information.

When you apply for a loan product, the lender will likely ask you about your income and will use this information when making a decision.

There is also no accounting of the amount income tax you paid and 42% of people expected to report this on their report.

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5. Fines appear on credit reports

Your credit report contains information about debts and defaults, and this acts as a warning signal to creditors.

However, contrary to the expectations of some, not all debts and fines are included here.

For example, 28% believe parking or driving tickets will appear on their reports, but this information is not reported to credit reporting agencies.

Like income tax, council tax payments and debt also do not appear on your report. Despite this, 61% of people thought both would show up on credit reports.

Missed mortgage payments will appear on credit reports for six years, but rent payments and debt will not appear.

If you have little credit, meaning you don’t have a detailed borrowing history, you can sign up for services that add your rent payments to your report to increase the likelihood of being accepted for a loan.

The best way to know for sure what’s on your credit report is to check it with each of the three major credit reporting agencies.

Find out more: how to increase your credit rating