One task everyone should perform once a year is to check their personal credit report. Not only can this help minimise the impact of ID theft but there also are a number of other reasons to check ……
What is a credit report?
A credit report is essentially a detailed record, compiled by a Credit reference agency such as Experian, of your credit history. Lenders, such as your bank, use this information to determine whether to lend to you and on what terms depending on your risk as a borrower.
What does it show?
- Your name and date of birth
- The electoral register (i.e. that you are on it for the relevant address)
- Your credit payment history
- Details of your credit cards and loans, including balances, credit limits, account statuses and the dates they were opened
- County Court judgements
- Bankruptcy and administration orders
- House repossessions
- Details of when you’ve applied for credit
The information on your credit report is then used by lenders to generate a credit score, but this score is not part of the report itself.
Blimey, what doesn’t it show?
- Criminal Records
- Marital Status
- Inside leg measurement
Basically, it only shows details relevant to your credit history and the taking out of credit.
Why should I check it?
- To ensure all the details on the report are correct
- To check your credit rating – it is better to check there is no issue ahead of applying for credit, otherwise that dream house could remain just that. If you need to take action due to an adverse score you will have a bit of time to improve things.
- To ensure credit has not been taken out in your name without you realising. A lot of people have had credit cards falsely taken out in their name and they’ve been none the wiser until they themselves were refused credit or the bailiffs came knocking.
I heard that if you check your credit report this damages your credit score?
This is an urban myth. The fact you checked will be noted on future reports but it won’t affecting any credit scoring.
How long is information kept on my record?
- 2 years for a credit search by a potential lender
- 6 years for late payments and defaulted accounts
- 6 years for closed accounts
- 6 years for bankruptcies
What if there is something strange on my report or it contains incorrect information?
If the details are simply incorrect then contact the lender directly who will update their records and the credit reference agencies, eventually (usually after a month).
If you suspect fraudulent activity has taken place then contact the rating agency in the first instance who can talk you through what you need to do. This will likely involve contacting CIFAS, the UK’s Fraud Prevention Service who can put an entry on your report for protection, and or the police.
How do I get my credit report?
The good news is that it can be done online and is free. I’ve personally used Experian before and have had no complaints and it's free.