7 Things This New Consumer Credit Report Reveals

We provide easy access to personal credit reports on UK consumers. Before even considering the approval of a potential client for credit, it’s important to understand exactly what information can be gleaned from checking their consumer credit report.

The following is based on the consumer credit reports provided by ConsumerCheck.com which can provide an online credit check on any UK consumer. The website also provides an example credit report on their website which shows much of the information discussed below.

Credit reports are used in a wide range of industries in order to ascertain the ability of a customer to stick to repayments – whether it’s a mortgage, loan, credit card, vehicle or interest-free purchase, the financial history of a customer can paint a picture of their willingness and reliability when it comes to settling any outstanding amounts owed, allowing businesses to carefully consider all facets of an individual’s financial background before committing to anything on paper. Below we take a look at some of the information that a consumer credit report can reveal about potential clients, and how to best use this information before making a decision.

Here is a summary of what you can see in a ConsumerCheck.com report.

The basics

It’s easy to overlook something as simple as the address of a client, although it’s important to bear in mind that should a customer begin to fall behind on payments, knowing for certain where they reside is the first natural step in recovering any monies owed. Correctly spelled names and accurate dates of birth are also paramount to recovering any potential debts, as they will be required should a creditor wish to go through the court system. A credit report should detail whether the customer is on the electoral register at the address, which helps provide an up-to-date, accurate picture of their current residence. Never underestimate the basics.

How much a potential client currently owes

It’s not unusual for clients to have outstanding debts to other companies, and a consumer credit report will highlight how much they owe and who they owe it to. Of course, that’s not to say that outstanding debts are necessarily a bad thing – the only negative when it comes to credit is an ability to make repayments, which brings us neatly to our next point.

Missed/late payments

Any missed or late repayments on current or past accounts are recorded on a credit record, which can provide a useful insight into how reliable a potential customer is – for example, a business might decline credit to a customer who has a large number of missed/late payments to a number of similar companies, such as a payday loan lender or buy-now-pay-later mail order firm.

A current credit score

Credit ratings are based on a points system, separated into ten bands – very low risk to highest risk, and everything in between. Credit scoring models differ, but as an example Normal risk customers may have a credit score somewhere between 566 and 572, whereas lowest risk clients can reside anywhere between 596-1000. Those at the other end of the spectrum score between zero and 537. The most well known example of credit scoring are the FICO scores. The credit scores used in ConsumerCheck.com are based on this type of score card, although ConsumerCheck.com also provides a simplified 1-10 risk score.

Whilst there’s no such thing as a credit blacklist, such scores are frequently used by companies when deciding on whom to provide credit to, and those in the higher risk bands often face paying higher interest rates.

Details of financial products

Understanding what type of financial products a potential customer holds (for example, current accounts, savings accounts, ISAs etc.) can help to develop a picture of how much capital he or she is likely to have, which correlates directly to an ability to pay back credit.

County court judgments

County court judgments (or CCJ’s) are legally binding decisions handed down by the county courts, and are essentially orders to repay monetary sums which are documented on the register of CCJ’s, which is used by credit reference agencies in order to assess whether an individual is credit-worthy. CCJ’s mean that an attachment of earnings can often be applied, meaning that money is deducted by the courts directly from the wages of the person with a CCJ, which would of course impact negatively on their ability to keep up with any new repayments.

Bankruptcy/voluntary insolvency issues

If a person is declared bankrupt or enters into a voluntary insolvency agreement, such information can be retained on file for a prolonged period of time, often as long as seven years. Although previous insolvency might not necessarily have an impact on a potential clients current ability to repay, it can be useful for an underwriter to know when gauging whether to provide credit or not.