What is a credit report and how does it affect me?
Many lenders will search at least one credit reference agency’s when you apply for credit. They search your current address, and sometimes your previous address depending on how long you have been there for information relating to you. As each credit reference agency has different customers, your credit report will differ slightly , depending on which credit reference agency is searched.
Most credit decisions are made using a process know as credit scoring. Credit scoring is considered the fairest way of assessing an application for credit, because it is unbiased and treats everyone in the same way using a standard set of rules. Tests have shown that credit scores based on a search of your credit report can assess credit applications much better than human judgment can. They also take account of the fact that credit reports vary slightly from different agencies. If you wish to see your whats your credit report, Experian the UK’s number one credit reference agency provide a service know as Credit Expert which lets you view a copy of your credit report instantly online free for 30 days. And for a small fee of £5.95 they will also calculate this information into you national credit score.
Alternatively you can write to the credit reference agency’s including a fee of £2 and request a statutory copy of the information held on you which should be dispatched within 7 working days this however will only include the information held on you not you credit score.
Your credit report section by section
Your payment history – Commonly shows balances or repayment information from credit card and store card accounts, any loans you may have, mobile phone accounts and some bank accounts. Information from these are reported monthly to the credit reference agency.
The electoral roll – Quite simply displays any information about you held on the electoral roll.
Court information – This section will show insolvency records and any CCJ(County court Judgments) Registered against you.
Other Information – The final section of the report may contain gone away warnings and fraud warnings as well as the information on any company’s that carried out a check of your file.
As many lenders share your information with more than one credit reference agency, there’s little difference in your credit rating, no matter which credit reference agency is used. Each of the three credit reference agencies usually has enough information about you for a lender to make a well informed decision on whether its a good idea to offer you credit or there service.
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