A Credit Reference Agency is an organisation that is licensed under the Consumer Credit Act to hold information about individuals that is available to lenders when an application for credit is made.
When you apply for a loan, the company which you apply to with will buy a credit report from one (or all) of these agencies – namely Equifax (as used by Zopa), Experian, and Call Credit. They will then be able to see details of current outstanding debt, repayment history, and any defaults or CCJ’s.
Agencies will also assign you a score, based on the information they hold. Applications for credit will show up on your report and can cause your score to erode. Zopa is an exception to this rule, and an application for a loan will not be detrimental to your credit score, even if you’re declined.
You can get in touch with any of these agencies to check your own credit report for a nominal fee, and it is advisable to do so before making loan or credit card applications, to make sure there are no inaccuracies.