Credit reference agency (CRA, credit bureau)

What a credit reference agency does

A credit reference agency, or CRA, collects and holds information about how individuals and businesses manage credit, and makes it available to lenders and other authorised firms to support lending and other decisions. In the UK there are three main consumer credit reference agencies: Experian, Equifax and TransUnion. A lender checking an applicant will typically draw on one or more of them to see a picture of that person's credit history and current commitments.

The CRAs do not themselves decide whether to lend. They supply data, and often scores and tools built on that data, but the decision remains the lender's. It is a common misconception that a CRA keeps a single blacklist or makes approval decisions; in reality each lender applies its own policy to the data the agencies provide. Two lenders looking at the same file can reach opposite decisions, because their appetite, policy and pricing differ, which is exactly why there is no universal credit pass or fail.

Where the data comes from

CRA records are assembled from several sources. The backbone is shared data contributed by lenders themselves, showing how customers have handled their accounts. To that, public and other records are added, and a lender's own search activity is recorded on the file.

• Account and repayment data shared by lenders, often through reciprocal sharing arrangements
• Public records such as County Court Judgments and insolvency information
• The electoral roll, used to confirm name and address
• Searches recorded when a firm checks the file, which other lenders can see

How lenders use CRA data

Lenders use CRA data throughout the lending lifecycle. At application it feeds credit-risk assessment, scoring and risk-based pricing. It supports identity verification and KYC. During the life of an account it can be used, within the permissions the customer has given, to monitor for signs of rising risk. The data is also used to check affordability, by revealing existing commitments the applicant may not have fully declared.

The three agencies do not always hold identical information, because not every lender reports to all three and records can differ. This is why a lender may check more than one, and why an applicant can see different scores from different agencies. The underlying data matters more than any single headline score, which each agency calculates in its own way.

A further distinction lenders rely on is between a hard search, recorded on the file and visible to others, which is used when someone formally applies, and a soft search, which does not affect the file and is used for quotations or eligibility checks. Being able to offer a soft-search eligibility check lets a lender give an applicant an indication of their likely acceptance without leaving a footprint, which supports better outcomes by helping customers avoid speculative applications that could harm their file.

Data protection and the customer's rights

CRAs operate under UK data-protection law and are overseen in their conduct of regulated activity by the FCA. Individuals have rights over the data held about them, including the right to see their statutory credit report, and the right to have inaccurate information corrected. Where a record is wrong, the customer can raise a dispute, and the agency and the lender that supplied the data must investigate.

For lenders this creates an obligation to report accurately and to recognise that the data they rely on can be challenged and corrected. It also connects to the Consumer Duty: decisions made on inaccurate CRA data can produce poor outcomes, so treating the data as authoritative but not infallible, and giving customers a fair route to correct it, is part of acting in their interests.