For those looking to borrow money, or for anyone who uses finance in their life, credit scores are everything. A good score means you have access to the best deals on the market, at the best rates. A poorer score however means that you will be restricted in what you can borrow. What’s more the rates offered if lenders do accept you will often be higher than for those with a clean report. Thus is it highly advised to regularly check your credit report and see if it is healthy. And if not, what you can do about it. Moolr took a look at how to check your credit score.
In the UK, companies called ‘credit reference agencies’ (CRAs) compile information on how well you manage financial decisions and make your payments.
There are three main CRAs:
Each of them holds a file on you, called a credit report (or credit file), although the information might differ slightly between the agencies. The general criteria used however is the same.
Your credit report typically holds the following information:
Your credit report doesn’t carry other personal information such as your salary, religion or any criminal record.
When you apply for credit the process will involve you giving your permission to the credit provider to check your credit report.
Employers and landlords can also check your credit report, although they’ll usually only see public record information such as your electoral register details, any insolvency records or CCJs.
Bear in mind that different lenders look for different things when looking at your credit report and deciding whether to lend to you. They use reports though to check your record at paying back debts on time and in full. For lenders it is a matter of trust. Your score will decide whether they will lend to you, and what rates they will offer.
All credit agencies have a statutory obligation to provide you with a copy of your credit report for free. You can access the report online or by asking for a written copy.
It’s often worth getting a copy of your credit report from all three main CRAs if you’ve not applied for it before or if you’ve not checked it for quite some time. That’s because they might have different information from different credit providers, although there is quite a lot of overlap between them.
If you’re applying for a loan, mortgage, credit card or other borrowing then it might be a good idea to check your credit report first. This is especially true if you have not looked at it for some time. It always makes sense to check it from time to time in order to ensure there are no mistakes. you could even notice missed payments that you did not know about.
You can check your credit score as often as you like and it won’t affect your credit rating or credit score. Only when you apply for credit and lenders search your credit report that there’s a record left on your credit report. Thus it is important not to apply to loads of different companies for credit. It will leave marks and prospective lenders will see it as a sign of desperation.