What do credit reference agencies do with your data?

You probably already know that credit reference agencies (CRAs), like Noddle, hold lots of data but you may have misconceptions about what they do with it.

The best way to think about it is to view CRAs as gatekeepers to your personal data. We’re essentially custodians, housing and protecting the information we’ve collected. However, we also add value to data by turning it into something incredibly useful indeed – a credit report and score. These are used by consumers and lenders to help form smart lending and borrowing decisions.

Nevertheless, there are some less commonly known things CRAs do with data to assist lenders, the Financial Conduct Authority (FCA) and other regulators.

Here’s a list of other lesser known ways a CRA could use your data:

CRAs can assist with regulatory and market investigations to support the FCA.

When the FCA has an investigation into market fairness, competition fairness or other inquiries, a CRA might be required give them access to their database. CRA’s have to do this because the FCA are regulators of the financial industry in the UK. Think of the FCA as the same as the police or other services that work for the general public: if a police officer asks to see your license, you’ll have to comply.

CRAs can support organisations in the identification and prevention of money laundering

Money laundering is a serious crime and CRAs have a responsibility to support organisations by identifying individuals that may be linked to such activities.

Assisting employers with employment vetting

Some companies, particularly in the financial sector, may require you to have a good credit score and financial history when you apply for a job, so credit reference agencies can assist here. If you’re handling other people’s money, the assumption is that a healthier financial history means you’re less likely to mismanage the financial information of other consumers. A good credit report and score can also let employers know that you’re reliable, stable and have the ability to make smart decisions!

CRAs can assist lenders with the identification and prevention of fraudulent applications

This doesn’t just help lenders but it also helps you. If someone makes a suspected fraudulent application for a credit card in your name, the information that CRAs hold can help lenders verify the authenticity of the application.

Now that you know the potential ways a CRA may use your data, you can go a step further and find out exactly what data we might hold on you by signing up for your free-for-life Noddle credit report and score.