Money Insider: Keep a close eye on your credit history


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The Independent Online

Does your credit record contain the correct information? While many people will have heard of the term credit record, research from credit card provider Aqua shows that less than half of people have checked their own file to see what it contains.

Reasons for this include not knowing where to get the information, and assuming that it's an expensive and complicated process – but the main explanation is that consumers simply don't appreciate how much their credit history can affect their everyday life.

An impaired credit rating can prevent you getting a mobile phone contract, or the best energy tariff, and it could mean that applications to borrow via a credit card, loan or mortgage will be declined or that you'll be charged higher interest.

There are three main credit reference agencies in the UK – Experian, Callcredit and Equifax – and to obtain a statutory copy of your own report from any of these companies will cost you just £2. You can choose to see the information online or arrange for a copy to be posted to you.

If you've never looked at your record, I'd recommend that you pay the £2 just to check what information is registered against your name. For all you know, the details may be incomplete or incorrect, thus making it more difficult and more expensive for you to obtain credit.

Your credit report contains details of your balances, limits and payment history. It will also list any late or missed payments on your existing loans and credit cards as well as previous borrowing you've had during the last six years.

Your record will also include details of any bankruptcies and county court judgments as well as the amount you owe on your credit agreements together with details of searches and new applications made.

It's also worth trying to dispel some of the myths surrounding credit reports and credit reference agencies.

Make sure you are registered on the electoral role otherwise you won't appear as being listed at your address if a lender makes a credit search.

Third-party information, including details of members of your family who live or have lived with you, does not appear on your credit file as long as you don't share any joint financial commitments. If you have any financial associations with former partners, for example joint accounts, make sure these are closed down.

Other people who have lived at your address will not affect your credit score. Information that you won't find on a credit record includes details of savings, student loans, Child Support Agency details or criminal records.

If you're looking for a few tips on how to improve your credit rating, take a note of these. Close credit card accounts that you're no longer using. Even though your balance may be zero, any prospective lenders will take into account any existing credit limits you have available to you when assessing applications for new finance.

If you apply for credit and are declined, don't make further applications with other lenders in the hope that one may say yes: multiple applications and searches on your file within a short period will have a negative impact on your credit rating.

Having no record of managing credit can count against you so it's worth having a credit card and using it a few times each year – if you repay the statement balance in full and on time it won't cost you a penny, but it demonstrates that you are capable of managing credit and will reflect positively on your file.

If you've never taken a look at your own credit file I'd recommend getting hold of a copy as one of your New Year resolutions – it could turn out to be £2 well spent.

Andrew Hagger is an independent personal finance analyst from

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