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O2, Credit Files & "Credit Scores" - What does it all mean?

Level 19: Quirky
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I posted quite extensively on a recent thread about credit files and realised that there were quite a few misconceptions, so thought a bit of a mini guide about O2 and your credit files may help fill in some blanks, and also provide a resource to help other customers in the future.

Some of this is about credit files in general, and some specific to O2, although it all ties in together.


Applying for an O2 account

When you apply for an account with O2, various checks will be carried out - your identify and your address will be checked to confirm you are who you say you are, and if you are applying for a credit facility (that's any Pay Monthly account) then a search will also be conducted with the credit reference agencies (CRA's) before an account can be opened. If you've already got a relationship with O2, your account will also be reviewed to check for things like your payment history, any debts owed and also things like how many lines you have.


The reason for these searches is to verify the information provided in your application, and also to check whether a credit facility can be made available to you based on the information held on your credit file - more on this later.

Based on the outcome of these searches, a decision will be made about whether an O2 account can be opened for you, and on what terms. Usually the outcome will be one of the below -


Accepted - your application for an O2 contract on standard terms has been accepted, and your phone and/or sim card will be dispatched to you, or made available to you shortly. This is definitely the answer that you'd most like to see, and the answer O2 want to give, however they do have a duty to act as a responsible lender which is why this isn't always possible.


Declined - based on the information provided in your application and that found during the searches conducted, O2 are unfortunately unable to provide you with a credit facility/pay monthly account at this time. This is usually accompanied by the advice to check the records held by the CRA's who were consulted as part of your application. Not great news obviously, but if you're not aware of a problem it really is worth following the advice and checking your credit files (see below) to find out what's gone wrong. If your application has been declined due to an arrears balance owed to O2, they are usually able to tell you this and help you get it sorted so that your new account can be approved and opened.

Deposit Required - your application has been accepted, however a security deposit is required. Quite often this is the case where you may have very limited credit history on which a decision can be made, or have adverse credit which increases the risk to O2 but does not mean that an account cannot be offered at all. So long as you maintain your monthly payments in accordance with your agreement, this deposit can either be returned to you or applied as a credit to your O2 account after 3 months.


SIM Only - again usually where you have limited or imperfect credit history, and usually returned where you have applied for a contract which includes a handset, this means that only a Sim Only contract can be offered at this time. Similar to a deposit being required above, if you maintain your payments for 3 months without issue then you would usually qualify for an upgrade to a Refresh plan, subject to an few terms and conditions which you can find here.

Whenever a credit search is conducted, this will be recorded on your credit file - the information recorded is who you applied to and when you applied. To certain extent, the type of application/search is also recorded (ie. whether it's a telecom application, a mortgage application or a loan application) although it's important to remember that the outcome of any application is not recorded, so if you're not approved this does not necessarily reflect negatively on your credit history (although it can perhaps be "worked out" by prospective future lenders, as clearly no new credit account will be opened with that particular lender around the time the search was conducted - this would also be the case where the facility was not take up by the customer despite being approved, or where a more involved application such as a mortgage was not progressed so cannot be relied upon).


If you are applying for an O2 Refresh account, some CRA's will show 2 separate searches, as you are applying for 2 different facilities - a pay monthly phone account which is a credit facility as it allows you to incur charges for services (calls, SMS, premium services and also direct to bill charges) for payment at a later date, and also a fixed term credit agreement which is regulated by the Consumer Credit Act which allows you to pay for the handset in interest free installments over 24 months. You can find out more about how Refresh works here


Reporting the performance of your O2 account


As you may expect, credit files are a 2-way street, and in return for the information provided by the CRA's which O2 use to help make a responsible lending decision they agree to provide information about how your account is managed, so that it can be recorded on your credit file and used by other prospective lenders in making their decisions. Don't worry, they're very careful about the amount of information which is shared and also to make sure that it's accurate - full details can be found in your terms and conditions, here.


Quite simply, if your payments are made in full and on time in accordance with your agreement, this will be reflected on your credit file. Different CRA's record this in different ways, and to add to the confusion there are also some third party intermediaries who provide access to credit file data and they may also have their own way of displaying the information, however most commonly these "up to date" payments will be shown as either green dots or zero's (to signify zero months arrears).


Hopefully you'll always manage to make payments in full and on time in accordance with your agreement, however we all know that things to sometimes go wrong and life has a nasty habit of getting in the way. Best laid plans and all that. Firstly, and most importantly, if you do find that you're having difficulties making payments then make sure you speak to O2 - there's a dedicated Payment Management team to help, and they can be reached on 0800 902 0217 or by dialling 202 free from your O2 phone and asking to be transferred. If you do have arrears on your account, the first stage of restriction applied automatically forwards your call directly to this team too - remember, they can only work with you and help if they are aware of the problem.

Once payments are made late on your account, this will be reported to the CRA's in the same way as payments that are made on time. Again the agencies and intermediaries have their own way of displaying this date, but quite often you will see either a different coloured dot (amber/orange where payments are late, red for missed payments) or an increasing number which represents the number of months arrears. You may also see a letter L, showing that the payment is late.


Hopefully by the time things have reached this stage you will have been able to get back on top of things, or worked out an arrangement with O2 to get the account back on track, however unless the balance has been cleared in full the arrears will continue to be reported - if you've entered into an installment plan arrangement to clear the debt over a period of time, one of the conditions you agree to when setting up the agreement is that this will be reported as an "Installment Plan" (I) or "Arrangement to Pay" (AP) and will show up on your credit file as such.


If things reach the stage where O2 have to disconnect your account due to non-payment and it's either passed to an external debt collection agency, or sold to a debt buyer who will commence their own enforcement action to recover the balance due (plus their costs) then your account will be reported as being in default, and this will be reported on your credit file usually as a D or a black coloured dot (which is perhaps where the colloquial phrase "black mark" comes from). This can also occur where an account is disconnected at a customers request, however a final bill is produced but not paid, which is why it's never recommended to cancel any Direct Debit instructions yourself, as O2 will cancel them automatically once all sums due have been paid (or, sometimes, once any refunds due have been issued using the instruction) Where an account is defaulted, the record will also show the date of default, the amount due at the date of default, the amount which remains outstanding and whether or not the debt has been satisfied.

As mentioned above, O2 Refresh contracts are made up of 2 separate accounts - the airtime account and the device plan credit agreement - therefore you should expect to see both of these accounts being reported to the CRA's. The airtime account will show under the "telecoms/utilities" section usually and the credit agreement will be under loans, as this is a regulated loan agreement covering the full purchase price of the handset or other device.

***** "It's really, really important to remember that your payment performance history will remain on your credit file for 6 years *****


Credit files, credit ratings and credit scores


As touched on above, all of the CRA's and intermediaries who provide access to credit file data have their own ways of displaying this information, so it can get a bit confusing at times. Most if not all will provide a key, or a guide to how they interpret the data reported and what the report you can see really means, so it's worth taking the time to familiarise yourself with this.


One of the most common misconceptions regarding credit information is that everybody has a universal "credit score" which determines their credit worthiness, however this isn't the case. The confusion comes from "credit scoring", which most lenders use to assess credit applications and make lending decisions, and this is absolutely the case - however each lender will have their own specific lending criteria, and will use their own complex algorithms to calculate an internal "credit score" against which they make their decision. This credit score would not usually be known to the applicant however, and in any event would mean nothing to them as it's simply an assessment of their circumstances and background when compared to that lenders criterion. This internal score would likely be different to scores generated by other lenders when assessing applications, and would mean nothing to any other lender.


This confusion is further compounded by the CRA's themselves and the credit file intermediaries who often generate proprietary "credit scores" which are based on their own interpretation of the data held on your credit file. Whilst these can help to give a reasonable reflection of your financial/credit situation (for example, if you're right at the top of the scale the changes are you're managing things pretty well, where as if you're just a couple of points off the bottom then you may be struggling) these numbers don't actually mean anything directly to anybody as they are just an interpretation, not based on the lending criteria of any individual lender, and whilst they are based on the data held by that CRA they also won't take into consideration data held elsewhere, or other pertinent information about your circumstances. Lots more really helpful information about credit files and credit scores can be found here.

That's quite an important fact to bear in mind, each CRA will hold their own "Credit File" of information about you, which will be made up of things like the number of credit applications made, accounts held and payment performance (as discussed above), county court and insolvency records as well as other personal details, however the same information may not be held by all CRA's - some lenders only report to one CRA, some report to all and some may not report at all. Likewise some will search one, some will search all and some may not bother with a credit search when assessing your application. No one individual credit file from any agency or intermediary should be relied upon to provide the full picture, so it's always worth checking what data is held by all of them.


What if it's not right?


So you've checked your credit file (remember, not your "credit score") and you're concerned that the information reported may not be correct? Don't panic! The first thing to do is to speak to the lender in question. If this is O2, give the customer service team a call on 202 from your O2 handset, us using any of the other contact details available here They'll then be able to check and confirm what's going on with your account and what should be reported, and if the issue relates to something that has gone wrong on your account it can be put right for you. Again, specific to O2, however if you still don't think the data reported is accurate then you can contact who will be able to look directly at the data feeds to the CRA's and confirm what is being sent over. If you have a copy of the credit file you are querying, it would help to provide this to the team so that they know exactly what they are looking at.


Please do bare in mind that the team (and other lenders no doubt have similar teams) can only make changes to the data being reported where it is incorrect - if any negative data is being reported because it is a true reflection of your account performance then unfortunately this cannot be removed, as all lenders are legally obliged to ensure that reported data is accurate.


The CRA's themselves also have a facility for you to dispute data with them directly, so that queries can be fed back to the lenders in question, however this process often takes much longer and can involve the need for signed authority forms before changes can be made, therefore it's always advisable to discuss any concerns with the lender in the first instance as they are the ones who control the data they report.


Contacting the CRA's and checking your credit files


There are 3 main CRA's in the UK, and you have a right to access the data held by each of them. Most lenders will be able to tell you which CRA's they search the records of when making lending decisions, and also which they report account performance data to. They all provide easy to use online access, and there are also intermediaries as referred to above who can provide access to your credit file data via websites and apps, along with credit file monitoring services and the "Credit Scores" talked about earlier - often for an upfront cost or subscription.

If you don't want all of the bells and whistles, you are entitled to request a copy of your Statutory Credit Report for a cost of just £2 from all of the CRA's. This would give you everything which is available to prospective lenders, and allows you to make sure that all data is being reported as it should be. I've listed the contact details for the 3 major CRA's below, along with links to the relevant information for requesting a statutory report.

Hope this is of some help slight_smile

Credit Reference Agencies -




Customer Support Centre
Experian Ltd
PO BOX 9000
NG80 7WF


0344 481 0800




Statutory Report




Equifax Ltd
Customer Service Centre
PO Box 10036


0800 014 2955


Statutory Report


Call Credit


One Park Lane
West Yorkshire


0330 024 7574


Statutory Report