How lenders check your credit history

If you've ever filled out a loan application form, the chances are the lender has checked your credit history or credit score. This will influence them when deciding to give you a loan or not. But, do you know how the lender uses the information on your credit record?

Most lenders use a credit reference agency, the Irish Credit Bureau (ICB) to check your credit history and see your track record in repaying previous loans. The ICB builds your credit history using information it gets from your lenders about your loans, mortgage, credit cards and other loan agreements. Data on individual loan accounts and judgments on mortgages is also kept by Experian Ireland.

What is your Credit Bureau Score?

Why your credit history is so important

Check your own credit record

What if there is a mistake on your credit record?

What is your Credit Bureau Score?

Your Credit Bureau Score summarises the information in your credit report. When lenders ask for information from the Irish Credit Bureau, they can ask for this score as part of your report.

The score is calculated based on your credit history, for example, the number of late payments you made, the number of accounts you hold and the numbers of applications of credit you have made in the last 12 months. As this information changes over time, your score will go up or down.

A high (positive) score does not guarantee that you will be given a loan. Your lender may look at the score along with other details, then decide whether or not to approve your loan.

Why your credit history is so important

Part of your agreement when you sign up for a mortgage, loan, car finance (hire purchase agreement), credit card, overdraft or make any loan application, is that you give permission to your lender to send information about your repayments to a credit reference agency, such as the ICB. This information forms your credit history.

It typically shows:

your name, date of birth and address
names of lenders and account numbers of any loans you currently have or that have been closed within the the last five years
a history of all repayments made or missed for each month on each loan, including any loans or credit cards you did not pay off completely
a score based on your credit history called your Credit Bureau Score
a record of any legal action your lender took against you.

If you missed repayments, failed to clear a loan or credit card or settled a loan for less than you owed, it will show up on your credit history for five years after the loan is closed. This may result in you being refused another loan.

Your credit record gives a full picture of your credit history, good and/or bad. A bad credit rating may mean that you will be refused a loan, even if you have the income to repay it.

Check your own credit record

Most lenders use the ICB as their credit reference agency. You can request a report of your credit history by contacting the ICB and paying a small fee. The ICB will send a copy of your report in the post.

You cannot change a bad credit record if all the information is correct
A credit report provides an accurate and honest record of your loan repayment history. Unless the details are wrong, your information cannot be changed. And, if your details are wrong, the ICB must receive a formal request from your lender before they will change them.

What if there is a mistake on your credit record?

If there is a mistake, you are entitled to have it corrected. For example, you could complete a direct debit form incorrectly and miss a repayment, or your lender could agree to let you postpone repayments, but forget to note this on the report it sends to the credit bureau.

If you find a mistake in your record, ask your lender to write to the credit bureau to correct your record and ask for a copy of their letter. If this does not solve the problem, you can contact the Data Protection Commissioner for further advice, or complain to the Financial Services Ombudsman.