Looking to apply for credit in the near future? Our 5 minute credit report health check will help you prepare.
When you apply for credit, the lender will check your credit history to see how you manage your finances, so you need to make sure it’s as good as it can be.
Checking your report on a regular basis means that you know exactly what’s on it and it puts you one step ahead of the lenders.
So, if you’re thinking of applying anytime soon, it’s a good idea to check it, we’d recommend every month, to make sure everything is up to scratch.
And we’re not talking an in-depth study here – there are a few things you can quickly scan over and keep an eye on. It won’t take you more than five minutes, we promise!
Where do I check my credit report?
The good news is that you can get your credit report for free from Noddle, ClearScore or CreditMatcher. There are no hidden charges to worry about.
Right, let’s get started
Here are three quick things to check:
1. Your account and payment history
Your credit report shows all of the credit accounts you hold, as well as your payment history over the last six years.
This tells lenders whether or not you’ve met your payments on time and whether you paid in full, in part or if you just paid the minimum amount.
And, most importantly when it comes to your credit rating, it’ll show if you missed or defaulted on a payment – this is what you need to look out for.
Make sure that all of the accounts and the associated payments recorded on your credit report are accurate. If they’re not, you need to act quick.
Get in touch with the credit reference agency to ask them to check and update the mistake. Any errors, such as a missed payment that you actually paid, will damage your credit rating, so it’s important to get them fixed.
2. Check the searches
There are two different kinds of searches to look out for – hard and soft.
A hard search should only appear when you’ve made an application for credit. A soft search will appear if you’ve got a quote for something, checked your eligibility for a credit product or made a personal search. Hard searches do have an impact your credit rating, but soft searches won’t.
Make sure you recognise all of the searches listed on your account.
Any that you don’t recognise, particularly if they’re a hard search, could mean a lender or the agency has made a mistake on your report, or in rare instances, it could be a sign of identity fraud.
If you spot one on there that you don’t recognise, contact the lender and double check whether it’s correct or not. Or you can raise a dispute with the credit reference agency themselves. If you think you may have been a victim of fraud, contact Action Fraud as soon as you can.
3. Check your financial associations
A financial association is someone you have a joint credit account with – whether it’s a mortgage, loan or any other type of credit agreement.
This other person will show up on your credit report and lenders will often consider their credit rating when you apply for one of their products.
If there’s a name on there you don’t recognise, or someone you’re no longer associated with, like an ex, get it touch with the credit reference agency and ask for their name to be removed. Here’s how to get it fixed.
Likewise, if the person you’re linked to has a poor credit rating, it could be a good idea to disconnect yourself from them, as this could have a negative impact on your future applications. You will need to pay off any outstanding joint debt from the account before you can close it.
And there you have it. We’d recommend you do a more thorough check with all three of the credit report websites every six months or so to go through each section in more detail.
Disclaimer: All information and links are correct at the time of publishing.