Understanding Your Credit Record

Despite the fact the credit reports can make or break any applications for loans or credit and even affect your ability to rent a home, a large number of people are in the dark about their credit status.

According to new research by uswitch.com, more than 15 million people have never checked their credit report. Failing to check your credit record is a big mistake.

The problem is, however, that they can be hard to understand even when you do. So don’t get caught out by a bad credit report, and read on to find out what you need to know.

What is in a Credit Record?

Generally speaking, your credit record documents all of your financial history in a file. A statutory credit report shows all the information that lenders will see when they request your credit file. It lists:

• Name and Date of Birth
• Current and Previous Addresses
• Bank and credit card accounts,
• Overdrafts, outstanding debts,
• Repayments and when you made them
• Details of anyone financially linked to you
• Bankruptcies, Individual Voluntary Arrangements (IVA’s), or County Court Judgements (CCJ’s)
• Registration on the electoral roll

Personal information such as your occupation, employer, or race or religion are not included in your report.

Check for Errors in Reports

There is danger in relying on credit agencies to always get things right. Often, creditors can fail to inform credit reference agencies of satisfied (repaid) debts, or make general mistakes. 25% of people find errors on their credit report, and the problem is made worse by the fact that there are three major credit reference agencies, meaning that the wrong information can be with all three companies. So always go through your report with a fine toothcomb and get a copy of your credit report from all three credit reference agencies if you’ve not applied for it before. If you have difficulty understanding it, use an online credit report checker who provide a complete explanation of the results. If you do find any mistakes in  your report, you have the right to have them amended. To do this, write to the credit reference agency, and ask for the mistake to be corrected. You may also add a ‘notice of correction’ which explains any reasons for having not made any repayments.

Improving your Credit Record

When you have poor credit, it’s important to get it fixed. Negative financial information stays on your report for six years, but the sooner you rebuild your credit, the better. Key to this is making sure you are registered on the electoral register, keeping up with debt repayments, paying on time, and using credit to show you are financially responsible. If you can apply for a ‘bad credit credit card’ and use it sensibly, then this can help rebuild your credit fairly quickly. However, you need to be sure not to get in further debt using this approach. Ultimately, if you are having trouble with unmanageable debt you should always seek help and advice.

By Harry Price

Harry Price is a writer who lives on the south coast with his wife and 3 dogs.  They all enjoy long coastal walks by the sea, especially on a cold and windy day.