Beginner's Guide To: Credit files

January is the month when many people look to sort out their finances and try and obtain the best deals, especially those who have debts to clear.

Times are tough for those who wish to obtain credit, with market leading deals being reserved for those with an impeccable credit score.

But do you actually know what your credit file looks like, and if you had it in front of you, would you know how to read it?

What is it?

Your credit file basically paints a picture of how you manage your current credit commitments. It also includes details such as electoral roll information – this proves that you live where you say you live, any county court judgments, defaults, repossessions, bankruptcies and people and addresses that you have been associated with. This information is used by banks and building societies when assessing any application for credit you may make.

How can you get hold of your credit file?

You can obtain a copy of your credit file from one of the credit reference agencies: Experian, Equifax and CallCredit.

What to look out for

Your credit file will show payments made on your current commitments usually over the last 12 months. It will show if the payments you have made have been made on time and in full. It will also show your outstanding balances and credit limit on all of your commitments.

Payments made on time will show as a 0 if you have missed any payments this will show as a number. For example if you have missed one payment, this will show as a number 1; if you have missed two consecutive payments, this will show as a 2; and so on.

What if there are any errors?

If you believe there is incorrect information on your file, contact one of the credit reference agencies. They will then investigate this for you and contact the lender on your behalf. If the information is found to be incorrect, this will be amended accordingly.