How Do I Get hold Of My Credit Report And What Should I Do?
Every adult in the UK has a credit rating. This is based on your history of how you have used credit and lender or other service provider's experience of their dealings with you. You may not have borrowed any money, but you will still have a credit rating. Your score is accessible by lenders and service providers as an indication of how risky you are assessed to be when considering lending you money or granting credit. Many larger banks and lenders will have their own credit scoring systems and will vary slightly depending upon the criteria they use to assess certain factors versus others in your personal details.
However, most lenders and banks will look to one of the major credit reference agencies for an assessment of your credit rating. The good news is that this rating is also freely available to you and you have the ability to challenge any information held if it is not correct.
Every time you borrow money (be it a mortgage or a furniture loan), take on a service contract (such as for a mobile phone) or use store credit, you will generate a credit history file. If you make all the payments on the due date, you will have an excellent rating and 'score' more points. Defaulting on payments (for any reason) generates a negative entry and detracts from the points. You will also receive points for appearing on the Electoral Roll (which is used to confirm your residence) and for the number of years you have been registered there. This indicates a level of stability in your personal circumstances and indicates that you do not move around frequently.
Likewise, another factor that can add to your score is homeownership. But, as you may expect, there are a number of situations where your credit score can be adversely impacted due to, for example:
•The number of times your credit file has been searched by lenders (an indication that you are looking for credit); •Any disputes that you have had with lenders or credit reference agencies; •Insolvency or bankruptcy petitions; •Fraud warnings; •The use of known alias's to trade under; •Being linked to an associate with a known adverse credit history (for example, living at the same address as a bankrupt); •Adverse payment experiences by any of your lenders or service providers.
As you can tell, the information that is pooled on you is quite extensive and it is possible that some of it may not be correct (due to errors in collation) or improperly recorded.
As the recession hits harder, arguably the biggest single asset that any one can have is their credit score. With a good score you will find applying for, and receiving, credit will be much easier as banks and other lenders seek quality customers who are less likely to default. You can only improve your credit score over time – not immediately – as many of the factors that add points need the experience of your performance over time to be demonstrated. However, a good credit score can be wrecked in a day due to a missed payment or other debt issues.
There has also been a recent trend towards identity fraud. This is where another individual applies for credit in the name of an innocent other without their knowledge or permission and then defaults on payments. This, potentially, counts against the innocent party.
One way to see what your crdit score is and whether there is information that needs to be challenged is to apply to see your credit report from one of the main agencies. Experian (www.experian.co.uk) is one of the largest credit reference agencies in the UK and is used by many organisations as their source of scoring. Other companies supplying credit reports include Equifax (www.equifax.co.uk), www.Freecreditreportsinstantly.co.uk and www.annualcreditreport.co.uk. There are many other sources available and an internet search for 'credit report' will yield over 11 million entries! Usually, the initial report will be free with subsequent reports being charged at a small monthly premium. Some offer fraud prevention services by notifying you every time your file is accessed or changed.
All credit reports that you receive will come with details of how you can challenge any incorrect information. In some instances, this can be done online with a dispute feature that enables you to fix any errors quickly. You may not be able to remove some records – but at least you can get the facts straight. Do not expect an easy time, though, and for anything material you will need to be able to evidence why the information shown is incorrect or not applicable.
All information collected and held is governed by the Data Protection Act. Whilst there is a statutory report format that is available from all credit reference agencies, most will charge a small administrative fee for its supply. Free reports provided by the agencies tend to be more comprehensive.