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What is a Credit Report?
A credit report is a detailed history which includes information about any accounts you have opened which provide you credit. This could include information from about credit cards, mortgages, car loans and more. When you apply for new credit, typically a lender will first review your credit report to get an idea of how much risk may be involved in lending money to you. The higher your potential risk, the less likely you are to be approved for credit. Even if you are approved with a bad credit report, your rates will typically be much higher which can cost you a fortune in interest over the life of a loan.
3 Major Credit Reference Agencies in the UK
To get a real idea of where you stand you will need to get your credit report from all 3 of the major credit reference agencies. These agencies all collect information from lenders to help build a picture of how well you’ve handled your debt in the past so future lenders will know if you’re credit-worthy or not. Due to human error, reporting mistakes and other factors out of your control your 3 credit reports may have different information on them. When you apply for credit you can never be 100% sure which of your credit reports they will review so it’s important that all of them reflect favorably upon your credit history.
- Equifax - Equifax is a global leader in credit reporting and a major credit reference agency in the UK. They provide credit reports for both consumers and businesses.
- Experian - Experian is another major player in the credit reference industry. They provide credit reports to over 100,000 clients so the next time your credit report is being checked, odds are it may be your Experian credit report.
- CallCredit Check - CallCredit is a credit reference agency that only collects data based for consumers in the UK. They issue a standard credit report similar to the other reference agencies including personal information and credit account history details.
What’s on my Credit Report?
- Personal Information - Credit reports should always be kept in a safe place or shredded because of all the personal information they contain. This information can include your name, address, last known address, previous addresses and employment details. This personal information is typically established or updated when you apply for credit.
- Financial Information - Of course any credit report is also going to contain a lot of financial information about you. This includes all of your accounts that have had activity in the last few years, even closed accounts. It also includes details regarding monthly payments on all of your accounts. You can quickly see at a glance whether or not all of your accounts are in good standing or if some have become delinquent.
Who Reports to the Credit Reference Agencies?
- Credit Card Companies - Credit card companies report the good and the bad to the credit reference agencies. If you’ve paid on time your credit report will be filled with positive information. If you’ve been more than 30 days late on any payment your credit report will reflect that as well. Credit cards are not only a convenient way to pay, they’re also a convenient way to build your credit.
- Lenders - Any company you’ve taken out a loan with will report to the credit reference agencies. This includes personal loans, student loans, mortgages and car loans. You will have entries on your credit report outlining all of the payments you have made which makes it extremely important to always pay your bill on time every month.
- Utilities - Utilities such as your cell phone, cable TV or even internet provider will report to the credit reference agencies, but only if you miss payments. It costs money to make reports to the reference agencies so some companies will only report negative information if needed to persuade you to pay them.
Who Checks my Credit Report?
In this modern world with easy access to the internet and information worldwide, credit reports have become an increasingly popular way to check up on somebody. Whether or not you have good credit will dictate many things in your life including:
- Employment - Employers can use credit reports to see how responsible prospective employees may be. A bad credit report can indicate periods of unemployment and irresponsibility.
- Housing - Landlords can also use credit reports to see how likely it will be that you will pay your rent on time. If you have a lot of late payments on your credit report you can forget about moving into that nice flat you’ve always dreamed of.
- Lenders - Of course lenders will also check your credit report before offering you any credit. Usually the terms and conditions of the credit or loan will reflect how good your credit report is.
How to Check Your Credit Report
There are a number of agencies who will provide you with a free credit report online. You can get a free copy of your credit report from the annual credit report website once a year. Unfortunately, the annual credit report site won’t provide you with your credit score. This will cost extra.
If you’d like to check your credit report more than once per year there are services which will provide you with a credit report AND credit score when you sign up for a free trial of their credit report monitoring services. Credit report monitoring is an invaluable service that will notify you of any changes made to your credit report. This can help you to detect and prevent identity theft and usually only costs a few dollars a month after the trial period is complete. For the price of buying your credit score alone you can typically get your free credit reports, your credit score and credit monitoring.