How to check your credit report
Have you ever wondered how a bank or lender decides whether or not to give you credit? One of the tools they use is your credit report (or file). This tells them about your credit history and helps them assess how much of a risk lending to you will be.
Who compiles credit reports?
In the UK, there are three main companies that compile information on how well you manage credit and make your payments. They are:
What’s in your credit report?
Your credit report typically holds the following information:
- A list of all your credit accounts. This includes bank and credit card accounts as well as other credit arrangements such as outstanding loan agreements or those with your utility company. They will show whether you have made repayments on time and in full. Items such as missed or late payments will stay on your credit report for at least six years. So too do court judgments for non-payment of debts, bankruptcies and individual voluntary arrangements.
- Details of any people who are financially linked to you, which means you’ve taken out joint credit.
- Public record information such as County Court Judgments (called ‘Decrees’ in Scotland), house repossessions and bankruptcies for six years after they occur.
- Your current account provider, but only details of overdrafts.
- Whether you are on the electoral register.
- Your name and date of birth.
- Your current and previous addresses.
- If you’ve committed a fraud (or someone has stolen your identity and committed fraud) this will be held on your file under the CIFAS section.
Your credit report doesn’t carry other personal information such as your salary, religion or any criminal record.
Who looks at your credit report?
When you apply for credit the process usually involves you giving your permission to the lender to check your credit report.
The term ‘credit provider’ doesn’t only include banks, building societies and credit card companies but mail-order companies and, for example, providers of mobile telephone services – if you have a phone contract (but not if you’re on a pay as you go deal).
Employers and landlords can also check your credit report, although they will usually only see public record information such as electoral register information and whether any County Court Judgements (or Decrees in Scotland) or insolvency records are held against you.
Where to check your credit report
All three credit agencies have a statutory obligation to provide you with your credit report for £2, and you can access your report online or by asking for a written copy. Your statutory credit report shows a snapshot of your current credit history.
Callcredit (under the brand name Noddle) and ClearScore (who base their service on Equifax data) also offer free access to your credit report for life. So it may be worth just applying for this rather than paying for a statutory report.
It is often worth getting a copy of your credit report from all three credit reference agencies if you’ve not applied for it before or if you’ve not checked it for quite some time. That’s because different credit reference agencies may have credit information from different lenders (although there is quite a lot of overlap between them).
Full credit report services
Be aware that repeatedly applying for credit can harm your chances of getting credit, as lots of credit searches may indicate you’re having problems.
You can get free 30-day trials of more comprehensive credit checking services from Experian and Equifax, which include your full credit report. However, you normally have to give your credit or debit card details when you sign up to the free trial and money will be taken from your account unless you cancel in time.
You can look at your report as many times as you want for no charge during this free trial period.
What’s a credit score?
Your credit score is an assessment by a particular lender or credit reference company of how good a credit risk you are, based on its own criteria. A good score is no guarantee you’ll be able to borrow money, as different lenders have different criteria for choosing customers.
How lenders use credit reports
Bear in mind that different lenders look for different things when looking at your credit report and deciding whether or not to lend to you.
When should you check your credit report?
Did you know?
Some companies will choose not to lend to you if you haven’t always managed your credit well and don’t have a good credit rating, while others may lend but charge you a higher rate of interest or offer you a smaller amount of credit.
If you are applying for a loan, mortgage, credit card or other borrowing then you should check your credit report. If not, it’s a good idea to check it from time to time to make sure there are no mistakes or that you haven’t missed any payments without realising it.
You can check your credit report as often as you like and it won’t affect your credit rating or credit score.
It’s normally only when you apply for credit and lenders search your credit report that there’s a record left on your credit report. However, in some cases if you try and get a quote for something like a loan or credit card, there may be what’s called a ‘footprint’ on your file. See if you can find out what kind of credit file search a prospective lender will carry out.
Improving your credit score and correcting your credit report
It is possible to improve your credit score, sometimes by simply cancelling unused credit cards and there are other steps you may be able to take.