You could be forgiven for thinking that your ‘credit rating’ is just one piece of information that all lenders access to help decide whether or not they’re going to provide you with a loan. In actual fact, it isn’t quite that simple.
In the UK, there are three main credit referencing agencies (CRAs). Equifax and Experian are two of these CRAs – and probably the most well-known.
Here, we’ll explore Experian vs Equifax in a little more detail, as well as answered a few associated questions, including:
- Which is better – Equifax or Experian?
- Why is my credit score different on Equifax and Experian?
- Do all CRAs use the same information?
What’s the difference between the main CRAs?
In reality, credit reference agencies all do the same job. The difference is, some lenders only report to one of the agencies.
So, you’re looking for car finance; you’ve checked your credit report with Experian; yet you’re offered a higher rate than the finance company is advertising – or they’ve declined your application – why?
Chances are, the lender is using a different CRA – and since the CRAs don’t share information as such, they might be looking at information you’ve not seen. To continue the example from above, perhaps you’ve had problems with a previous loan from a company that only reports Equifax – and now, you’re applying for car finance with a company that using Equifax – you can probably see why you wouldn’t see any issue with your Experian credit report.
Why is my credit score different with different CRAs?
We now know that different CRAs can end up showing different information when lenders check your credit history – but is that the only difference?
As if things weren’t complicated enough – the differences don’t end there!
Each CRA has a unique way of ‘scoring’ your credit history – so what looks like a good score with one agency might seem like a poor score with another. Experian scores your credit out of 999 (with anything over 880 being ‘good’), whereas Equifax scores your credit out of 700 (with anything higher than 420 being ‘good’).
If each CRA is working with the same information, then you should find that your rating (i.e. poor/fair/good/excellent) should be the same – even if the numbers aren’t.
What’s the best way to check your credit rating?
So, with different credit reference agencies each providing different scores – what’s the best way to check your credit rating?
Since buying a car is generally going to be an important and significant purchase, it’s often a good idea to check with each of the ‘big three’ CRAs; Equifax, Experian, and TransUnion. Now, this probably isn’t necessary if you’re confident about your credit rating – but if you’ve got any doubts, it’s worth requesting a copy of your report from each.
Don’t worry – this doesn’t mean signing up to their paid services. As part of the Consumer Credit Act 1974, you’re entitled to what’s known as your ‘statutory credit report’ – a report showing the information that’s held about you by each agency. These are the links you’ll need:
- TransUnion (previously known as CallCredit)
There used to be a small charge when you requested your credit report – but changes in data protection laws now mean the agencies must provide the information for free.
It might feel like a lot of work – but requesting the reports is simple – and when you receive them, you’ll just need to check for anything that’s inaccurate. If you find anything, you’ll be able to contact the lenders in question and ask them to put the records right. Since your car finance could run for 4-5 years, even a slight change that results in a better interest rate could save hundreds of pounds across the full repayment period.