Money & Insurance > Guides

Why your credit score matters and how to check it

Robin Bowman

Robin Bowman
Sep 27, 2016

When you apply for a loan or any kind of credit, the first thing the lender is going to do after taking your personal details is run a credit check on you.

Credit covers not only cash advances, but setting up things like accounts with utility companies and phone contracts.

So, it matters.

Your credit report profiles you in terms of risk – whether you are likely to be reliable or not, or somewhere in between.

The better your profile or score, the more likely you are to be granted credit and on better terms.

There are three main credit compiling companies, Experian, Equifax and Callcredit.

The score you have with each of these may vary a little, but not by much.

 

What’s in your credit report?

It holds all of the following: 

All your personal details, like date of birth, addresses, your bank and credit card details as well as other loan agreements including those with your utility company and whether you have an overdraft.

It will detail whether you have made repayments on time and whether you are up to date.

Any missed payments or other ‘black marks’ will sit on this report for at least six years, and this includes county court judgements made against you, or any other legal judgements, such as bankruptcies.

It will also show whether you are on the electoral register (very important). Your current and previous addresses.

If you’ve committed a fraud (or someone has stolen your identity and committed fraud) this will be held on your file under the CIFAS section.

Your credit file does not hold information about your salary, political affiliations or any criminal record.

 

How to check your credit report

You have a right to view your report from all three credit agencies and it will cost you £2.

Check your credit report for FREE

But there are free methods as well.

Try Noddle and ClearScore.

ClearScore offers free access to your Equifax information, while Noddle provides information from Call Credit.

They do this on the basis that you may at some point in the future go through them to buy a financial service for which they’ll earn a commission.

 

When should you check your credit report?

If you’ve never checked your report before, it’s worth looking at all three agencies’ reports to see there are no errors registered.

Similarly, if you haven’t looked yourself up for a good while, it’s wise to check everything is in order.

 

Getting a good credit score

Your score will be higher if:

* You own a property and/or you have lived at the same address for at least a year (lenders like to see stability).

* You are registered to vote where you live.

* You’re up to date with all payments and haven’t skipped them in the past – this includes utility bills.

* You are employed rather than self-employed and have worked for the same company for a long time.

* You are not connected to other people financially (joint bank account or mortgage, etc) who have a bad credit history.

We hope this little guide helped. If you found it useful, you can share it using the buttons at the top.

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