Jump to a letter#

A · B · C · D · E · F · G · H · I · L · M · N · O · P · R · S · T · U · V

Every term#

A — Adverse credit · Affordability · Alias · Annual canvass · Annual percentage rate · Application fraud · Application search · Arrangement to pay · Arrears · Audit search · Authorised push payment (APP) fraud

B — Bankruptcy · Basic bank account · Broker · Building society

C — Cash advance · Cifas · Cifas fraud type · Consumer Credit Act 1974 · Cooling-off period · County Court Judgment · Court information · Credit · Credit agreement · Credit card · Credit limit · Credit reference agencies · Credit report · Credit score · Credit search · Credit utilisation rate · Creditor · Creditworthiness

D — Debt assigned · Debt Relief Order (DRO) · Default · Disassociation

E — Early repayment penalty · Electoral roll · Enquiry search · Equifax · Experian

F — Financial association

G — Guarantor

H — Hard search · High Court Judgment

I — Individual Voluntary Arrangement

L — Liability · Loan to value

M — Mortgage · Mortgage valuation

N — Negative payment entries · Notice of Correction · Notice of default · Notice of Dispute

O — Overdraft

P — Payment holiday · Phishing · Principles of Reciprocity · Proof of income · Protective Registration · Public information

R — Repossession

S — Scottish decree · Search footprint · Soft search

T — TransUnion · Trust deed

U — Underwriters

V — Victim of Impersonation

Adverse credit#

Adverse credit is the term lenders use for a credit history that counts against you — late payments, arrears or defaults, for example.

Affordability#

Affordability is a lender's estimate of how much you can realistically pay each month. To work it out, they weigh up the financial commitments you already have against the amount you're asking to borrow.

Alias#

In credit reporting, an alias is a record of another name you've been known by in the past, or still go by now. It normally appears when one of your lenders reports a change of name to the credit reference agencies. Marry, or change your name by deed poll, and an alias will usually turn up on your credit report.

Annual canvass#

The annual canvass is the yearly exercise each local authority runs to bring its Electoral Register up to date. The new Register of Electors is typically published on 1 December.

Annual percentage rate#

The annual percentage rate, or APR, shows you the interest you'll pay on the money you borrow. It's the useful way to compare the cost of credit between one lender and another, and lenders are required by law to display the APR on all their products.

Application fraud#

Application fraud is one of several Cifas fraud types. It's where an application is made in your name but false details are used alongside it — a made-up address, employer or salary.

When you apply for credit, a lender will carry out an application search — also known as a hard search — on your credit report. You'll find these listed in the 'Searches' section of your report, where an application search stays for 12 to 24 months.

Arrangement to pay#

An arrangement to pay is an agreement between you and your lender to raise or lower the cost of your monthly payments. It shows on your credit report as an 'AR' marker and stays there for six years. It can be read as a negative payment marker, so it will have a negative effect on your credit score.

Arrears#

Arrears show on your report when you've missed two or more months of payments in a row. A lender may apply the 'In Arrears' status before issuing a default, if they believe they have little chance of reclaiming what you owe.

An audit search is a type of soft search that can appear on your credit report. It normally shows where you've checked your own report, or where an existing lender has checked your current status. Audit searches stay on your report for 12 to 24 months, depending on the agency involved.

Authorised push payment (APP) fraud#

Authorised push payment fraud — usually shortened to APP fraud — is where someone is tricked into sending money to a fraudulent account. The fraudster typically poses as your bank or another trusted organisation and tells you that you need to move money to a different account urgently.

Bankruptcy#

Bankruptcy is a type of insolvency. If you're declared bankrupt, your financial affairs are managed by a trustee or by the Official Receiver, who works out how much can be repaid.

Being bankrupt gives you protection from debt collection efforts on the debts included in the bankruptcy. It also damages your creditworthiness, stays on record for six years following your discharge, and is entered on a publicly accessible Bankruptcy and Insolvency register.

Basic bank account#

A basic bank account is a current account without any additional features. It lets you deposit and withdraw funds, and schedule regular payments from the account.

Broker#

A broker is someone who acts as an intermediary between you and a lender. If you're buying a home, for instance, you can use a mortgage broker to find the best mortgage offers.

Building society#

A building society is a financial institution offering services like mortgages and savings accounts. Unlike a bank, it's owned by its members, and building societies were originally set up to help people in a particular area buy their own homes.

Cash advance#

A cash advance is another name for a cash withdrawal on your credit card. In general it's not a good idea to use a credit card this way. Lenders may see it as a sign you're struggling to pay for essentials, and you'll pay a high interest rate on the money you take out.

Cifas#

Cifas is a not-for-profit fraud prevention service that helps consumers and lenders protect against credit fraud and identity theft.

Cifas fraud type#

There are two types of Cifas warning — also known as case types or markers — that show on your credit report.

Victim of Impersonation is registered by a lender if it believes you have been the target of identity fraud. Sources differ on how long it stays — some give 13 months, others say it remains for as long as the filing lender considers necessary. Ask the lender who filed it if the exact date matters.

Protective Registration is one you request yourself. If you're at risk of identity fraud you can ask Cifas for a protective registration for a fee, and it stays on your report for two years.

Cifas also holds several other case types that lenders can see but which don't appear on your credit report: facility takeover, application fraud, asset conversion fraud, misuse of facility, and insurance claims fraud.

Consumer Credit Act 1974#

The Consumer Credit Act 1974, as amended by the Consumer Credit Act 2006, regulates consumer credit and consumer hire agreements. It's the law that gives consumers protection on purchases, and it sets out how credit should be marketed and managed.

Cooling-off period#

A cooling-off period is the time you have to cancel an agreement without incurring any penalty. In consumer credit the cooling-off period is 14 days, permitted by the Consumer Credit Act 1974 as part of your Right to Withdraw.

County Court Judgment#

If you have a County Court Judgment, or CCJ, it means the court has ordered you to pay back what you owe.

Court information#

In credit reporting, court information means the publicly available court records held about you — County Court Judgments and insolvencies, for example.

Credit#

In simple terms, credit is money you borrow on the basis that you'll repay it later, often with interest.

Credit involves two parties: a creditor (or lender) and a debtor (or borrower). The creditor provides the resources — granting a loan, for example — and the debtor is expected to repay the borrowed amount at a later date.

Credit agreement#

A credit agreement is a legal contract between you and a lender, setting out the terms of your credit for a specified amount of time, in accordance with the Consumer Credit Act 1974.

Credit card#

A credit card is a payment card issued by a bank that allows you to borrow money to buy goods and services.

Credit limit#

A credit limit is the maximum amount of credit that you can use, most often on your credit card.

Remember it's a limit, not a goal. It's a good idea to stay well below your credit limit — around 30% or less is the usual recommendation.

Credit reference agencies#

The three main UK credit reference agencies are Experian, Equifax and TransUnion. They report public and credit-related information about individuals, drawn from a variety of sources.

Credit report#

A credit report, also referred to as a credit file, is a record of your financial history with money you've borrowed — things like credit cards and mortgages. When you apply for credit, lenders use your credit report to help them make a decision.

Each of the UK's three main credit reference agencies — Experian, Equifax and TransUnion — keeps its own credit report on you, and each must give you a copy free of charge.

Credit score#

Your credit score is a rough measure of your chances of getting credit, such as a mortgage or a credit card. Everyone measures credit scores slightly differently, so there's no universal number, and it isn't fixed forever.

A credit search is a check made by an organisation to examine your financial status, using a credit reference agency. There are two types of search: 'hard' and 'soft'.

Credit utilisation rate#

Your credit utilisation rate refers to how much of your available credit you're using, shown as a percentage. If you have a credit card with a limit of £1,000 and you've borrowed £100, for example, your credit utilisation rate would be 10%.

Creditor#

A creditor, or lender, is the person or company who has given finance or a credit product to a borrower. The money borrowed is usually paid back in regular instalments over an agreed period of time, with interest.

Creditworthiness#

Creditworthiness is used by lenders to describe how likely a person is to pay back the money they've borrowed on time. It's based on the information found on their credit report.

Debt assigned#

Debt assigned means a debt has been passed on to a third party, or that an arrangement to pay the debt has been made with the original lender.

Debt Relief Order (DRO)#

A Debt Relief Order, or DRO, is a type of personal insolvency — a free alternative to a bankruptcy or an IVA. You'd need to speak to an authorised debt advisor and meet certain eligibility criteria, though.

Default#

A default can happen if you miss lots of payments in a row. It's a serious negative marker on your report, and it will affect your chances of getting credit.

Disassociation#

A disassociation is the process of removing a financial association from your credit report.

Early repayment penalty#

Some lenders will charge an early repayment penalty — also known as a redemption penalty, an early repayment charge or an ERC — if you pay off a loan or mortgage before the scheduled term of the credit facility.

Electoral roll#

The Electoral Roll, known properly as the Electoral Register, is the record held by your local authority which shows that you have registered to vote. Credit reference agencies and lenders use this information to verify your identity and address.

An enquiry search is a soft search of your credit report. It could be a check by a landlord or an employer, a quote for a credit product, or the use of a comparison website.

Enquiry searches show on your credit report, but they're not the 'hard' searches that happen during a credit application. Most enquiries stay on your report for one to two years. Enquiries from debt collectors can stay for six.

Equifax#

Equifax is one of the UK's three main credit reference agencies. The other two are Experian and TransUnion.

Experian#

Experian is one of the UK's three main credit reference agencies. The other two are Equifax and TransUnion.

Financial association#

A financial association is another individual who you've had a perceived financial relationship with. That means anyone you've either applied for credit with or jointly hold credit with — usually partners, spouses and family members.

Guarantor#

A guarantor is someone who agrees to pay a loan or a routine payment, such as rent, on your behalf if you can't pay. This person is usually a relative or close friend — certainly someone close to the borrower.

A hard search, also known as an application search, appears on your credit report when a lender checks it as part of a credit application.

These searches can affect your credit score, and they'll show on your report for 12 to 24 months depending on the credit agency involved.

High Court Judgment#

A High Court Judgment, often called an HCJ, means the High Court has ordered you to repay what you owe.

An HCJ begins as a County Court Judgment. A CCJ will be transferred up to the High Court when especially large amounts are involved, and to allow for more recovery options — such as the use of High Court enforcement agents.

Individual Voluntary Arrangement#

An Individual Voluntary Arrangement, or IVA, is a type of insolvency. It's a formal, legally binding agreement with your creditors to pay back part, or all, of your debt over a set time period.

IVAs are often considered less severe than bankruptcies, but they still negatively affect your credit report and make it harder for you to get credit in future.

Liability#

A liability is any form of loan, borrowed credit or financial obligation that needs to be paid. A mortgage, a loan, legal fees, or interest that you pay might all be called a liability.

Loan to value#

Loan to value, or LTV, is often used in mortgage lending to describe the ratio of the amount you're looking to borrow to the property's value. LTV can also be expressed as a percentage of the property's value.

Mortgage#

A mortgage is a large, secured loan that you can take out to help you buy a property. The most common mortgages are 'capital and interest' — also known as repayment mortgages — which means you pay back the amount owed as well as the interest, over an extended period.

Mortgage valuation#

A mortgage valuation is carried out on the property you want to buy by an agent appointed by your mortgage lender. It's different to a survey, and is usually based on comparisons from local house sales to provide an estimated value for the property.

Negative payment entries#

Negative payment entries, also called negative payment markers, are placed on a credit file when an account is either not paid on time or not paid in the manner agreed in the original arrangement.

Notice of Correction#

A Notice of Correction is a small note of up to 200 words that you can put on your credit report to explain something lenders may call into question. It can also be used to notify lenders that you've been the victim of fraud.

Notice of default#

If you've missed lots of payments in a row, your lender will send you a notice of default. It's a formal letter that gives you 14 days to pay what you owe. If you can't pay, the account will enter default.

Notice of Dispute#

When a credit reference agency receives a data dispute in your details, it may add a Notice of Dispute to your credit file while the matter is looked into. It's a placeholder, telling anyone viewing your file that some of the information on it is being disputed. It comes off automatically once the dispute is resolved, and has no effect on your score while it's there.

Overdraft#

An overdraft is a loan from your bank attached to your current account. It means you can still use your current account when the balance goes below £0.

You can repay it on demand — there's no formal repayment schedule — but you may be charged interest for using your overdraft.

Payment holiday#

A payment holiday is a feature offered by some loans and mortgages that allows you to miss the occasional monthly payment, agreed in advance. It's always worth checking with your lender whether this will affect your credit report.

Phishing#

Phishing scams are where fraudsters trick their victims into revealing personal information — bank details and passwords, for instance — through scam emails, calls and texts, or fake websites.

Fraudsters will often gather some information about their targets first, from whatever is publicly available on social media, before making contact.

Principles of Reciprocity#

The Principles of Reciprocity are a set of guidelines that ensure the fair trade of information by encouraging the sharing of data between sources. This is the basis of credit reporting.

Proof of income#

When you apply for a mortgage, you might be asked for proof of income. This is usually your last three months' pay slips and your P60.

Some lenders also ask to see your recent bank statements, so they can see the monthly credit to your account.

Protective Registration#

If you're at risk of identity fraud, you can ask Cifas for a Protective Registration, for a fee. It stays on your report for two years. It's worth considering if you've been the victim of a crime in which personal documents were stolen.

Public information#

The public information on your credit report is the data taken from publicly available sources. This includes your Electoral Roll status, insolvency records such as any bankruptcies or IVAs, and County Court Judgments.

Repossession#

Repossession refers to a lender taking the item which was offered as security on a secured loan, in the event of payments entering default. If you can't pay your mortgage, for instance, your house might be repossessed.

Scottish decree#

A Scottish decree is a judgment issued in Scotland through the Sheriff Courts, legally recognising that a debt is due. It's the Scottish equivalent to a County Court Judgment in England and Wales.

Search footprint#

A search footprint is a record of when your credit report has been searched, either by yourself or by others. There are two types of search footprint: hard searches and soft searches.

There are two types of soft search that can appear on your credit report: an enquiry search and an audit search.

They have no impact on your credit applications unless they're carried out by a debt collector. Most soft searches will stay on your report for one to two years, depending on the agency involved.

TransUnion#

TransUnion, formerly Callcredit, is one of the UK's three main credit reference agencies. The other two are Experian and Equifax.

Trust deed#

A trust deed is a type of Scottish insolvency, in which the debtor's assets are controlled by a trustee so that payment can be arranged for creditors.

Underwriters#

An underwriter is a person who subjectively assesses your credit application. They'll examine the risk involved with lending to you, and decide whether to accept your application.

Victim of Impersonation#

If you've been the victim of identity fraud and a lender has received a fraudulent application in your name, you may see a Victim of Impersonation entry on your credit report. The lender adds it through Cifas. It works as a warning to other lenders to run extra checks on your identity when you apply for credit, and it has no effect on your credit score. See Cifas fraud type for how long it stays.