Credit Reports

What is a credit report?

Essentially credit report has information about your credit activity, past and present. It will show any loans, credit cards and other forms of credit and debt that you have had in the past; and whether repayments have been made on time or not, such as repaying a loan. It will also show your current debt, credit accounts and products you currently have.

Other information includes personal details, for example, where you now live and where you previously lived, bank account details and joint credit accounts (for example, where you have a joint loan with someone else). Usually, this information comes from banks, credit card companies, governmental institutions and collection agencies. Lenders use credit reports to measure risk and see if you are likely to make repayments on time or not. 

What is a credit score?

A credit score is a number that is calculated in a way to represent your "creditworthiness". A higher number or score means a lender will more likely lend to you and offer you a better deal on a credit card or personal loan.

A credit score is based on the information in your credit report or file. In the UK, there are three main credit reference agencies (Experian, Equifax and TransUnion). Each one uses its own credit score rating system, so your score will vary depending on the credit reference agency. 

How do I check my credit report?

Credit reference agencies compile the information shown in a credit report; most of these offer free access during a trial as well as a monthly paid version. To apply, you will need to go to the agency's website and enter personal details as well as your bank card details.
Most will offer you full access to your credit report online for 30 days at no cost, after which you will be charged a monthly fee. You can cancel the service before the trial period is over to avoid the monthly fees. You can also request a statutory credit report from credit reference agencies which is free.

What is a "statutory credit report”?

Under the General Data Protection Regulation, credit reference agencies are legally obliged to supply you a version of your credit report upon request at no cost. The information in a statutory credit report will not be the same as the reports provided for a monthly fee, nor will it include features such as a credit score and alerts. It will, however, provide significant insight on the information held in your credit file.

Why do I need to check my credit report?

If you are looking for a new mobile phone contract, comparing credit cards, car loan or bank account, your credit report and score will be taken into account. Lenders use the information on your report to decide if you are potential risk or not. They may also use the information to offer you higher or lower interest rates or limit the amount they lend to you, depending on your status. So it may be especially important to check your credit score before you apply for any loan or credit. 

Regularly checking your credit report will help you track progress and make improvements. You will be able to spot any incorrect personal details and negative financial information. These can be corrected or disputed. Checks may also help you protect your identity, detect suspicious activity or fraudulent applications made using your personal details to obtain credit.