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What is a credit report?

A credit report holds details of your financial history usually from the last six years, these details include;

  • Existing credit such as loans, credit cards, store cards etc.
  • The amount of credit you have borrowed and how much you currently owe.
  • Details of any late or missed payments.
  • Any joint credit agreements you hold with another person.
  • Your past and present address details as held on the electoral roll.
  • Any bankruptcies, repossessions, county court judgements and individual voluntary agreements.

These details are obtained by several different sources; banks and building societies, service companies such as electricity providers etc. Records such as the electoral roll are publically available.

Updates are usually provided on a monthly basis, so if you pay off a credit agreement, this is likely to show on your report the following month.

The way your credit score works is simple, the higher the score the more likely it is that your application will be accepted.

Why is it important?

It is generally a good idea to check your credit report before you apply for any type of credit. Lenders will look at an individual’s credit report to determine how you manage your debt and in turn if you would be a desirable person to lend to. Getting familiar with your own credit report will enable you to be savvy when applying for a loan as you will have a good idea of what you are likely to get approved for.

It’s important to note that every time you make an application for credit, whether you are accepted or not, a footprint will show on your credit report, this will have a negative effect on your credit score so it’s essential to only apply for credit if you think you’re application will be successful.

How can I carry out a credit score check?

Credit reference agencies allow you to carry out a credit score check. The main credit reference agencies in the UK are Experian, Equifax and CallCredit. Most of these agencies offer a free trial period, visit their websites at;

www.experian.co.uk

www.callcredit.co.uk

The details on my credit report are incorrect

If you find that some of your details on your credit report are wrong don’t panic you can correct them. You can either contact the relevant lender and they should be able to correct the details, alternately you can contact the credit reference agency directly. They will review your details and contact the relevant lender and get this information corrected.

Identity Fraud

Your credit report is also a good way to protect yourself against fraud. If you regularly check your report it will be easier to notice anything untoward which you can in turn flag up immediately. Most credit reference agencies will also send you ‘web monitoring alerts’ when they notice your details have been found online and are therefore vulnerable to fraud.

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