Before applying for credit, it can be a good idea to check your credit report. When you apply for a loan or credit card, lenders will look at your report to help understand your credit history and how you manage debt.
If you know what your credit report looks like before you start applying, you’ll be in a better position to apply for credit which you think you’ll be accepted for. If you’re declined for credit and end up making multiple applications it can have a negative impact on your credit score, so it’s better to only apply where you think you’ll be successful.
What information is held on a credit file?
A credit report contains details of your financial history and typically includes:
- Any existing credit such as credit card accounts, overdrafts and loans
- The amount of debt borrowed and currently owed
- Service agreements such as 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
How is the information collected?
Some of the details are provided by banks and building societies as well as service companies such as electricity and mobile phone providers. 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 this is likely to be reflected in your credit file within a month.
How long are credit details held for?
Reports typically include information for the last six years. Credit providers are only really interested in your recent financial circumstances rather than your full credit history.
How to access your credit report
The main credit reference agencies in the UK are Experian, Equifax and CallCredit.
You can apply for a one off copy of your file or you can sign up to a credit monitoring service which allows you to view your file any time. You can even sign up to receive alerts when something changes. A small charge usually applies.
Each agency will give you a credit score based on the information held on your record. These vary across the different agencies because they each calculate it in a slightly different way.
Lenders will use the score given when considering a credit application. The higher the score, the more likely it is that an application will be successful. Our guide to managing and improving your credit score provides some help if you find your score is quite low.
How to correct inaccurate information
If you find some of your details are wrong you can correct them. Contact the relevant lender in the first instance. Most will have a standard procedure for correcting inaccuracies and you’ll be asked to provide some evidence.
If you can’t resolve the problem with the lender directly you can contact the credit reference agency. They will 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.
If you’ve missed payments due to a sudden change in circumstances you can contact the relevant credit agency and add a note of corrections to your file to explain why. This might be appropriate if, for example, you lose your job or get a divorce. Lenders should take this into account when considering an application.
In addition to checking your credit report when you’re applying for credit, it can also be a good way to protect yourself against identity fraud. Checking your file regularly means you’re likely to notice anything out of place relatively quickly.