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Your Credit Report explained

Debt Advice
Image courtesy of Stuart Miles /

You may have come across the term credit report and have some questions about what exactly is a credit report.

A credit report is a history of the credit accounts you have held and provides information about your past financial conduct.

Whenever you apply for a mortgage, credit card or loan the lender will take a look at your credit report and the information within it will be used to help the lender decide whether to approve or decline your application for credit. Should your application be approved, the information on your credit report will also help the lender decide what interest rate to charge you.

How can you check your credit report?

In the UK we have three credit reference agencies. These are: –

  • Call Credit
  • Equifax
  • Experian

The above commercial organisations compile information about you and provide this to the lender when you make an application for credit.

Not all information will be the same across the above credit reference agencies. Not all lenders will provide information to all three of the credit reference agencies, so information on one of your credit reports might not be on one of the others.

Because of the above it is important to check your credit report with all three of the credit reference agencies. Regular checking of your credit report for incorrect information or signs of ID fraud is also important.

What information is included on your Credit Report?

The information contained within your credit report is supplied by banks, credit card providers, loan providers and mortgage providers for example. This applies to accounts you currently have any any closed accounts that were closed before the six year reporting period expires.

Other information on your credit report could be provided from public sources such as the electoral register, mobile phone companies and mail order companies.

Information about when you have borrowed money and if you have made your repayments on time is recorded. Other information included is likely to contain: –

  • Whether you are recorded on the Electoral Roll at your current address.
  • Information about any missed payments or arrears on your accounts.
  • How much you currently owe to your lenders.
  • Information about late payments on current and previous accounts.
  • Whether you have a County Court Judgment Recorded against you.
  • Information of any joint accounts you hold for example a current account.
  • Whether you have been declared bankrupt or have entered into an Individual Voluntary Arrangement (IVA).
  • If your home has been repossessed or you have moved away and still owe money.
  • Details of your Credit Limit for credit card accounts.

Common Credit Myths

Having an excellent credit rating doesn’t guarantee you will be accepted for credit.

This might sound crazy but it’s true, applicants can have an excellent credit history but have rarely taken out credit. They are more likely to declined than someone who owes money to several lenders. The reason for this is that a lender might require you to have held and repaid several accounts. Not having any records of accounts being paid successfully can mean you are turned down.

Information on your credit report is retained definitely

Lots of the information on your credit report is not reported after a certain amount of time has past. For example closed accounts will be removed 6 years from the date they were closed. Default flags are also recorded for the same amount of time.

There is no such thing as a Credit Blacklist

Each lender has their own internal policy to decide whether or not to lend to someone. Whilst the information from your credit report plays an important part in their decision, other criteria are taken into consideration. Where one lender may decline you, another would welcome you with open arms. This can even occur when both lenders are getting their data from the same credit reference agency.

Making an application for credit will cause future applications to be declined

When you make an application for credit, the outcome of your application is not recorded on your credit file. However, be warned that making a large number of applications within a short space of time can harm your chances and can bee seen as financial trouble by potential lenders.

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