24 Jun 2009 Tell a Friend
You may not be aware of it, but if you have ever borrowed money the chances are that you have a credit report. This is a personal history of your financial transactions, taking into consideration mortgages, credit cards and loans, and even mobile phone contracts. Your credit report provides a snapshot of all your credit accounts, your repayment record and how well you are coping with your current financial situation. Lenders use it when they decide what kind of deal to offer you - or whether to turn you down for a loan or credit card.
The more you know about what your report contains, how it's used and what you can do to improve it, the better your chances of getting the credit you need. This summary will get you started. You can see your credit report for free with CreditExpert, and we would recommend that you take a look at it once you know what to look out for.
1. If you're over 18 and have ever taken out a credit card, loan or some other form of credit, then you are likely to have a credit report held by a credit reference agency - Experian is the UK's largest.
2. As well as listing your credit accounts and showing whether you make repayments on time and in full, your credit report contains a range of information that helps lenders assess whether you are a reliable borrower and can afford to take out more credit. Items such as missed or late payments stay on your report for at least three years, while court judgments for non-payment of debts, bankruptcies and individual voluntary arrangements (IVAs) stick around for at least twice that long.
3. Your report shows all your addresses over the past six years and whether you are registered to vote at your current home. Lenders use this information as a precaution against fraud to make sure that you live where you say you do.
4. Another section of your credit report lists the people with whom you share (or have shared) a joint account, such as a credit card or mortgage. They are known as your financial associates and, although their credit history doesn't appear in your report, lenders are entitled to also look separately at their credit history because their circumstances could affect your ability to repay what you owe.
5. Information in your report comes from two major sources - public records, such as court judgments and the electoral roll, and data supplied by lenders.