Between them Britain's two biggest credit agencies, Experian and Equifax, control billions of items of data relating to all of our borrowing and other financial commitments - and much else beside.

These agencies store all of our credit card balances and outstanding mortgage debts, our commitments to mobile phone contracts and even the sums of money coming into and out of our bank accounts each month.

This makes them a tantalising target for criminals. The latest Equifax security breach, revealed last month, is now understood to have affected close to 700,000 UK-based customers.

The US firm is now contacting affected customers in Britain. The stolen data is said to include email addresses, certain passwords and phone numbers. It has said the risk of identity theft is likely to be low, but is offering to help those affected by the breach with free account-tracking services.

But what does Equifax, and its counterpart Experian, actually do for us? And do we have any choice but to entrust them with our information?

What are credit reference agencies for?

On most occasions when you apply for credit - from a credit card to a mobile phone contract - the provider of the credit will check your credit history according to files held about you by an agency.