Car Credit Checks

Where to check your credit score and how to improve it 

What is a credit check?

If you've ever applied for a loan - car or otherwise - mortgage, insurance or any sort of finance, the chances are it will have involved a credit check.

Also called a credit search, this involves a company viewing your credit report - in other words your financial history. A company doesn't need your consent to check your credit history, but it must have a legitimate reason, such as you've applied for a loan or insurance.

Checking your own credit score - however many times - won't affect it or the chance of you being accepted for credit.

Under the Data Protection Act 2018 you have a right to request a copy of your credit report, dispute inaccurate information on your credit file and have errors corrected within 28 days.

Who can do a credit check?

Look at your own credit score and you may be surprised at just who has carried out a credit check on you. There are the obvious companies such as banks, building societies and credit card providers but also utility companies and mobile phone networks.

If you rent a house it's more than likely your letting agent or landlord will have carried one out when you first applied. Even employers can search, although they won't see your full report.

There are in fact two types of credit search - a soft credit check and a hard credit check.

What is a 'soft' credit check

The reason this is called 'soft' is that it doesn't affect your overall credit score in anyway. It's like a preliminary search in that a company will decide whether to give your application the green light without actually carrying out a full credit check.

When you look at your own score or a company searches your credit report as part of an identity check, this counts as a soft check.

Only you can see soft searches on your credit report - they are not visible to other companies. It also doesn't matter how many there are. 

What is a 'hard' credit check 

If you apply for any kind of finance such as a loan, credit card or mortgage, the company will carry out what is known as a hard check. The same goes for utility companies (so your gas, electricity and water) and pay-monthly mobile phone contracts.

A hard check is a complete search of your credit report so that the company can make a decision on whether to accept your application or not, based on the overall score.

Crucially, hard checks are recorded on your report. Why is this important? Well lots of credit checks can affect your credit score - sometimes for up to six months, which can seriously affect your chance of getting future loans or finance.

The more credit applications you make, the more hard checks will appear on your credit report. Companies will see repeated applications for finance as a red flag, indicating that you are borrowing heavily or struggling financially.

Where can I get a credit check?

There's no shortage of places to get a credit report and all offer a free check - it's a legal right. Some show your entire report free while others require a subscription service if you want to view more detail. Often there's a 30 day free trial - just remember to cancel your subscription before that time if you don't want to be charged.

ExperianEacbd 823-7ffc -48bf -aaa 4-fc 98afbc 1ef 9-Experian _-_logo_

Experian is probably the best known credit check company in the UK and one most people will be familiar with. It works with the big credit providers including Santander, Halifax and Barclaycard. It's free to set up an account and it can show you your eligibility for mortgages from a selection of lenders. 

How much does an Experian credit check cost?

You can get a free account at Experian which shows you a credit score (out of 999) and will show your eligibility rating before you apply for credit cards and personal loans. There are two paid for products - CreditExpert offers a daily Experian credit report and score, UK call support and credit report alerts along with web monitoring and dedicated fraud support. IdentityPlus gives you a daily Experian fraud report, web monitoring, dedicated fraud support and fraud alerts.

Product 

Monthly cost

Details

Free Experian account

Free

-

CreditExpert*

£14.99

New customers qualify for a 30-day free trial

IdentityPlus*

£6.99

New customers qualify for a 30-day free trial

UK Credit Ratings  UKCR_LGO

Manchester based UK Credit Ratings says it offers customers 'the ability to understand, monitor, and check their credit report and score.' It also includes a social media image check as according to UK Credit Ratings, your online social media image is often checked in order to determine if you are a reliable candidate.

How much does a UK Credit Ratings credit check cost?

You get a 14 day free trial with UK Credit Ratings after which the cost is usually £19.95 a month. However, we've arranged a special offer for readers which drops this to £14.95. You can cancel at any time with no charge.

Product 

Monthly cost

Details

UKCreditRatings Credit Report & Score*

£14.95

Charges start after a 14 day free trial

‡ Special offer rate for HonestJohn.co.uk readers

Equifax  Equifax .svg

The other well recognised name in the UK, Equifax was the first company to give UK consumers online access to their credit reports in 2002. Its score levels range from very poor (0-279) to excellent (over 466). This gives you an indication of how creditworthy a lender may find you, if you’re applying for credit.

How much does an Equifax credit check cost?

As with all the providers, you can view a copy of your statutory credit report online (for 30 days). An Equifax Credit Report and Score subscription is £7.95 a month but you can cancel it at any time.

 Product

Monthly Cost

Details

Equifax Credit Report & Score

£7.95

Free for the first 30 days

Credit Karma 23ef 59f 304288c 6c 9962d 5eef 5f 84806_h 0vi 5xo 8ip 48cg 5mvs 9a Copy

Credit Karma may be a new name when it comes to credit checks, but the company was previously called Noddle and before that TransUnion and Callcredit. It gives you free access to your credit report with no monthly plans. It makes its money by taking a small commission from product providers for any customer who uses its site and takes out a product, such as a credit card.

How much does a Credit Karma credit check cost?

A Credit Karma credit check is free and there's no monthly subscription service. It includes a list of your credit accounts (bank account, credit cards, loans and mortgages), a six-year payment history showing whether you have made repayments on time and in full, plus details of who has searched your credit file in the last two years.

Product

Monthly cost

Details

Credit Karma Credit Report & Score

Free

Credit report and score updated every seven days

ClearScore Clear -Score -logo -2-1

ClearScore, as its name suggests, is designed to make the world of credit scores simpler and easier with a 'beautifully' (its description) laid out credit report. It was acquired by Experian in 2018 but has remained free to use. It gives a credit score out of 700 and as well as the website, there's a ClearScore app.

How much does a ClearScore credit check cost?

ClearScore is free to use and gives you a full report. It's updated monthly and you can check it as often as you like. It shows six years of your financial details with full explanations.

Product

Monthy Cost

Details

ClearScore Credit Report & Score*

Free

Credit report and score updated monthly 

Checkmyfile  Logo (5)

Describing itself as the UK's only multi-agency credit report provider, Checkmyfile uses data from four credit reference agencies - Experian, Equifax, TransUnion and Crediva - giving a credit score out of 1000. Privately owned, it also has a very high rating on TrustPilot.

How much does a Checkmyfile credit check cost?

You can get a 30 day free trial after which the cost is £14.99 a month. You can cancel it anytime online. The report includes an online tool allowing you to remove inappropriate people from your Equifax, Experian and TransUnion files. It includes support from professionally qualified Credit Analysts who will guide customers through the process at each Credit Reference Agency.

Product

Monthly Cost

Details

Multi Agency Credit Report*

£14.99

Free trial for 30 days 

TotallyMoney Totallymoney

TotallyMoney is another provider that doesn't charge for a credit check. Your credit report is free and is scored out of 710. It will also show you comparisons of credit cards, loans and mortgages based on your score. 

How much does a TotallyMoney credit check cost?

There's no fee to get your credit report from TotallyMoney. Instead it makes its money  by receiving a commission if a customer clicks through to apply for a credit card or similar.

Product

Monthly cost

Details

TotallyMoney Credit Report & Score

Free

Credit report and score updated monthly 

CreditWise Creditwise Cap One _Lock Up .0 (1)

CreditWise is part of Capital One and its credit score is provided by Equifax - so it's scored out of 700. It's free to get a credit report and you don't have to be a Capital One customer.

How much does a CreditWise credit check cost?

CreditWise provides a free credit check service with your report and score updated once a month. You can also get a notification when your credit score changes. 

 Product

Monthly Cost

Details

CreditWise Credit Report & Score

Free

Credit report and score updated monthly 

What does a credit check show?

A credit report shows your financial history over the past six years - a timescale agreed between the industry and the regulators.

It gives companies a snapshot of how you manage your finances, covering things like loans, credit cards and utility bills. Over the past few years, credit reports have expanded to show more detailed information about an individual's finances.

Much of the information comes from banks and anyone you have borrowed money from or currently owe money to. Other information may come from places like the electoral register.

Companies will be able to see electoral roll information such as your name, address and date of birth plus any previous addresses you've been linked to in the past.

Included will be anyone you are financially connected to, such as joint accounts, mortgages, business partners or joint court judgments.

Your credit history will list the times you have borrowed money and how much you owe. The detail will include when how much you have paid back each month over the period you have had the loan and how much is still outstanding. It will also list any loans or credit cards that you had paid off.

Crucially for lenders, the report will list any late or missed payments on existing or past accounts or cards as well as things like County Court Judgments (CCJs). Other information includes whether your home has been repossessed and if you have been declared bankrupt or entered into an Individual Voluntary Arrangement (IVA).

What does it NOT show?

While a credit report includes information to help lenders make a decision, it is only a record of when you have borrowed money. The exception here is student loans which are not shown.

Other things not included in the report include your salary, details of savings accounts, the balance of your current account, council tax arrears, criminal record or any driving endorsements or fines.

What information do you need for a credit check?

Getting a credit report is very simple, although you do usually have to create an account. However, more often than not, you do not need any card details.

If you're over 18, all that's usually required is your name, date of birth, address (and any others if you have moved in the past three years). Different checks will ask for various information, sometimes mobile numbers and your mother's maiden name or your residential status. 

As an identity check, you will be asked some questions about your credit history, things such as who you bank with, which credit cards (if any) you have and what mobile network you are with. These can go into detail such as the credit limit on certain cards, so it's worth having all your financial information to hand and ready.

What is a credit score?

Your actual score is usually shown as a figure out of a total of something like 999 or 700. This number gives lenders a snapshot as to your risk level as a borrower - and ultimately whether they will accept your application.

Experian uses a rating out of 999 with the following scale:

Experian score
961-999 881-960 721-880 561-720 0-560
Rating
Excellent Good Fair Poor Very Poor

Different companies have different criteria when it comes to accepting applications. Just because you don’t meet the criteria of one lender, you may still be able to get credit from another.  

Equifax uses a rating out of 700 with the following ratings:

Equifax score
467-700 420-466 367-419 279-366 0-278
Rating
Excellent Good Fair Poor Very Poor

Noddle (also called TransUnion and Callcredit) has an unusual system with a rating out of 710:

Noddle score
628-710 604-627 566-603 551-565 0-550
Rating
Excellent Good Fair Poor Very Poor

Obviously the higher the score, the better, but the idea is that this rating represents your credit history over the past six years. It's how lenders make a decision - not just on whether your application will be successful, but also the rate of interest you will end up paying.

Why does my score differ between credit check companies?

Each credit check agency has a different scoring method and your overall score or rating my vary between them. The problem is that it's difficult to compare like for like. For example Experian uses a score out of 999 while Noddle uses a total of 710 rather baffingly.

What's more important is how each credit check company rates your credit score in terms of poor, good or excellent. This is what will be important to lenders who want to assess your application. 

All the big high street banks, building societies and credit card companies share their data with the three major credit reference agencies - Experian, Equifax and TransUnion (also called Noddle), so the majority of the information on your report should be the same.

There may be some differences as smaller lenders (such as payday loan companies) may only share information with one credit reference agency.

Where can I check my credit report free of charge?

You have a legal right to view your credit report free of charge from any credit check company. There are three main credit check agencies - Experian, Equifax and TransUnion (previously called Callcredit) which is now branded Noddle.

Noddle, ClearScore, TotallyMoney and CreditWise let you view your whole credit history free. But others require a monthly subscription if you want to see more information.

Most of the subscriptions have a trial period - usually 30 days - after which you'll be charged monthly. If you cancel your subscription before this period ends you won't be charged. It means you can get a full detailed report without paying anything. 

Credit Check Company Details Price after
ClearScore Free for full report Free
CreditWise Free for full report Free
Noddle Free for full report Free
TotallyMoney Free for full report Free
Experian* 30 day free trial, monthly subscription £14.99* a month
Equifax 30 day free trial, monthly subscription  £7.95 a month
UK Credit Ratings* 14 day free trial, monthly subscription £14.95*‡ a month
Checkmyfile* 30 day free trial, monthly subscription  £14.99* a month 

Free trial periods are usually for new customers only. ‡ Special offer rate for HonestJohn.co.uk readers

Is a credit check bad for your score?

It depends whether it is a soft check or a hard check. A soft check doesn't affect your credit score as these can not be seen by other companies. When you look at your own score or a company searches your credit report as part of an identity check, this counts as a soft check.

However, a hard check WILL affect your credit score. This is any firm application for finance such as loans, credit cards or a mortgage, but also applications with utility companies, insurance and mobile phone contracts. 

Several applications for credit in a short space of time can bring your credit rating tumbling down. Lenders will see you as high risk as it will appear you are borrowing a lot. The majority of hard searches stay on your credit report for 12 months.

What if there are mistakes on my credit report?

Although rare, you may find mistakes or even a fraudulent credit application, on your credit report - and it's important to get these sorted quickly.

A credit report is not set in stone, information can be changed if it's incorrect, but remember, the credit report is just that - a report - the information has come from various other parties and it is those who will have to be contacted to resolve any problems.

Handily, most credit check companies will contact organisations on your behalf, while making a note on your credit report that an entry is being questioned. If the company agrees to the changes, then your credit score will likely increase. The credit check firm has 28 days from your request to tell you if it has removed the entry, amended it, or taken no action.

If they don't and refuse to changes, you can add what is called a 'notice of correction' to your report with your comments - useful if you want to explain something such as a sudden illness that meant you missed a credit card payment. If you want to take it further, you can escalate it to someone like the Information Commissioner’s Office.

There is of course nothing to stop you contacting any banks, building societies or credit card companies yourself if you think information is wrong. It's also very straightforward to contact your local Electoral Registration Office, if there's an issue with your address details.

Why is my credit score low?

We're not saying credit scores are a dark art, but there are certainly lots of different factors that can affect your score. You may have never been in debt and paid all your bills on time, but that doesn't necessarily mean you will have a good credit score.

While your payment history - in other words whether you have paid your bills on time - has the biggest influence on your credit score, it usually only accounts for around 30 to 40 per cent of your overall credit score.

Individual accounts can make a difference. A very high balance on one credit card can be seen as a risk - the theory being that others you have may follow suit.

There is also your 'utilisation rate', often called your debt-to-limit ratio. This shows how much you are using your credit limits - it's essentially the ratio of your credit card balances against the credit limit of those cards. So even if you haven't missed a payment, a high utilisation rate can be an indicator that you're at risk of defaulting on a payment.

Other factors include the length of your credit history. A shorter credit history means there's less data on which to base a score about how you manage your finances, which can mean a lower score.

How can you improve your credit score?

The better your credit score, the more likely you are to be accepted for finance - and crucially the lower the rate of interest that you'll be offered. On things like PCPs this can make a big difference.

Improving your credit score isn't an overnight process though. It will take time to up your rating - your credit report covers the last six years and it can take up to three months to see improvements.

The easiest things to do are to check your details. Make sure you're on the electoral register - you don't need to wait for elections, you can do it here. If there any mistakes or innaccuracies on your credit history, get them corrected. Check addresses on old accounts too.

There are plenty of obvious things to do too such as ensuring you are keeping up payments to your accounts. This will show lenders you're a reliable customer. Keeping your credit utilisation low will help too - this is the amount of credit you have used as a ratio of your credit limit.

So for example, if your credit limit is £2000 and you have used £1000 of that, your credit utilisation is 50 per cent. Ideally you want this to be under 25 per cent to increase your score.

If you have a low score due to little credit history, you can build this up by getting a credit builder credit card. These usually have low credit limits and a high APR, but pay it off every month on time and you will see your rating increase.

There are other tips such as not withdrawing cash from credit cards and avoiding paying for car insurance monthly. Not only do they charge you more but it involves a 'hard search' which will affect your credit score. Essentially what you are attempting to do is show any potential lender that you are reliable and low risk.

What credit score do you need to buy a car?

There's no hard and fast rule when it comes to a suitable credit score for getting finance for a car. It depends on what kind of finance  - whether it be a car loan or a PCP - and the bank or dealer who is arranging the finance for you.

While there's no specific minimum score for getting credit to buy a car, if you have anything below a Fair credit rating, you may struggle to get your application accepted. According to Experian, in 2017, the average credit score required for finance on a new car was 713.

If your application is successul, it's also important to remember that the lower your rating, the higher the APR you'll be offered. 

Does applying for car finance affect a credit score?

Yes. Applying for car finance is a hard check and will be recorded on your credit history, the same as a morgage or credit card application. 

The more credit applications you make, the more hard checks will appear on your credit report. Companies will see repeated applications for finance as a red flag. If you're turned down for credit by one lender, don't apply for any more finance until you have checked your credit report to find out the reasons.

Can you buy a new car with poor credit?

Yes you can. But be prepared to suffer when it comes to the rate of interest you'll be paying. The best deals are unlikely to be available to you, so searching for a car finance deal can be frustrating - the very attractive headline figures are 'representative' and the actual APR is dependant on your credit score.

This doesn't mean you can't get finance for a new car, but it means there will be less choice and you will have to pay more in interest. It's better trying to improve your credit score first and remember that repeated hard checks will negatively affect your credit score.

Ask HJ

A company issued me a CCJ over an unpaid fine for a car I never owned - can I sue?

I was issued a CCJ for non payment of a parking fine for a car which I've never owned. I told the company about this on several occasions and gave them proof from the DVLA. I have since been to court and had the CCJ lifted but can I now sue the parking company for all the inconvenience caused including being refused a mortgage and loans, home insurance premium higher, etc because of the CCJ?
It would be an interesting case. You would need to realistically and "reasonably" quantify the total damage you have suffered, then take it to Small Claims: https://www.gov.uk/make-court-claim-for-money/overview/
Answered by Honest John
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