What is a credit report?

If you need to take out a personal loan or apply for a credit card, it’s a good idea to check your credit report. This will tell you what your credit score is. A good credit score shows you’re a responsible borrower – so you’re more likely to get approved.

Your credit report, or credit file, is an important part in any loan or credit approval process. When you apply for a credit product, such as a loan, mortgage or credit card, lenders will look at your report to understand your credit history and how you manage debt.

What information is on a credit report?

It contains details of your financial history including:

• Any existing credit such as credit card accounts, overdrafts and loans
• The amount of debt borrowed and currently owed
• Service agreements such as monthly payments like insurance or mobile phone contracts
• Details of any late payments
• Any financial products which you hold jointly with another person
• Any county court judgements, repossessions, bankruptcies and individual voluntary agreements
• Name and address currently held on the electoral roll

Know your credit score

It’s a good idea to check your credit score looks healthy before you start applying. Knowing this can help make sure there aren’t any problems that could prevent you from being approved. If you’re declined for credit and end up making multiple applications, it may have a negative impact on your credit score. So, it’s better to only apply if you think you’ll be successful.

In the UK, there are three credit reference agencies (CRAs): Experian, Equifax and TransUnion. Each agency gives you a credit score based on the information held on your record. These will vary across the different agencies as they each calculate it in a slightly different way.

Lenders will use the scores given alongside other information provided by CRAs when considering a credit application. The higher the score, the more likely it is that an application will be successful.

Checking your own credit score is considered a soft inquiry and won’t affect your credit rating. Some lenders will provide soft inquiry tools which allow you to check if you’re eligible or provide a quote without leaving any footprint of the search. Check if your lender offers this service, and make it clear to them that it’s what you’re looking for, especially if you are still shopping around.

Most lender requests to review your credit report after you’ve applied for credit are considered hard inquiries.

Your credit score will be affected by the number of hard inquiries that have been made against you. That’s why it’s important to know if you have a healthy credit score that's likely to be accepted before applying.

How is the information collected?

Some of the details are provided by banks and building societies. Even service companies, such as insurers, electricity and mobile phone providers can provide information on your credit file. Other records such as the electoral roll are publicly available.

The information is generally provided on a monthly basis. So, if you pay off a credit card bill one month it’s likely to show in your credit file the following month.

How to check your credit score

You can now check your credit score online for free. Each credit reference agencies (CRA) have a statutory obligation to provide you with a copy of your credit report.

You can check your credit score directly through the CRA’s website such as:

• Equifax
• Experian
• Transunion

If you’re looking to build your credit score, it’s worth keeping a regular eye on changes to your credit report. So it’s worth noting that each CRA offers different options and costs for accessing your credit score on an ongoing basis.

If you want a written copy of your credit report, you can find out more from the Information Commissioners Office.

Credit report FAQs

Get to know what’s in your credit report. Here are a few important things to understand about managing and improving your credit rating.

How long do credit searches stay on your file

While you can carry out soft searches frequently without harming your credit score, a hard check leaves an actual footprint on your score and is an indicator that you have applied for credit. Most hard searches show on your report for 12 months.

What to do if your credit report is inaccurate

You can fix your credit report if you find some of your details are wrong. Contact the relevant lender as most will have a standard procedure for correcting inaccuracies. Keep in mind you’ll be asked to provide evidence.

If you can’t resolve the problem with the lender directly you can contact the credit reference agency. They’ll review your details and may contact the lender who provided the information originally. If the information is found to be inaccurate the agency will correct it.

If you can’t resolve a disputed fact, you have the right to put together a statement explaining the disagreement. This should be attached to your file free of charge.

How long does a default stay on your credit file?

A default will stay on your file for six years – even if you’ve paid off the debt. The good news is, even if you have a default on file, your credit score can improve if you make payments on time and pay off your debts.

What is revolving debt on a credit report?

Any unpaid agreed amounts you carry over from month to month payments. This could be from credit cards, store cards, or overdrafts.

Being conscious of this – and your utilisation rate – is very important. The utilisation rate is the ratio of outstanding balances divided by your credit limit. And it’s one of the most influential markers on your credit report. Try to keep your utilisation rate below 30%.

What is a closed account on credit report?

It’s an account that’s no longer active and has been closed by either the account holder or a creditor. It can stay on your report for up to 6 years.

Missed payments

We understand life circumstances can change and missed payments may happen. You may lose your job or get a divorce and need financial support. It’s important to try to contact your lender as soon as you can if you think this might happen.

If you’ve already got a loan and are worried about missing payments, talk to your lender. You may be able to work out a payment plan that is more manageable.

Looking after yourself is more important than looking after your credit score.

Identity fraud

Checking your credit report can also be a good way to protect yourself against identity fraud. Checking your file regularly means you’re more likely to notice anything out of place. This includes accounts and charges you don’t recognise. If you do notice anything out of order, contact your bank immediately.

How to improve your credit score

If you do have a lower score, don’t worry. There are ways to improve your score, if you stay on top and manage your finances properly. Get started with our quick tips:

• Only borrow what you can afford
• Make payments on time and if you can’t, speak to your lender
• Keep a regular eye on your score
• Reduce the number of applications you make
• Keep your utilisation rate below 30%
• Make sure you’re on the electoral register
• Keep your identity secure

Helpful guides

We want you to have all the facts when it comes to loans and credit. Our guides can help you stay on top of your finances.