When do you check your credit report: every year, just before applying for credit like a mortgage, loan or credit card, or not at all?
While some of us may not even think about our credit report until we get rejected for a credit application, it makes sense to check it regularly. If there are any issues or problems you’re more likely to catch them if you look at your credit report more frequently.
Your credit report covers your credit history for the last six years, and is one of the tools lenders use to help them decide whether to lend to you. When you log on to your report using Equifax, Experian, or another credit report service, you might be surprised by what you see.
Unlike in the USA, you do not have one universal credit score as a number – whether a lender decides to accept you depends on their specific criteria. Instead, you should be looking through your credit report for any warning signals that might suggest something is off.
Check your info
First off, check that your address is correct. It may seem obvious, but this is usually one of the first things that lenders look at when they’re deciding whether to let you borrow or not so they can check you are who you say you are. If you’re not on the electoral roll or you’re registered to an address you no longer live at, you’ll need to contact your local authority. They’ll be able to send you a registration form and you can easily sign up to the electoral roll. Alternatively, you can register to vote.
You should also check any outstanding credit agreements you have. These can include loans, credit cards or store cards, or authorised overdrafts. You should be able to see how much you’ve paid off on each this month, as well as how many accounts you still have open.
If you have store cards open that you don’t use anymore, you might want to think about closing some of them. Lenders often look at how much credit you have access to when deciding whether to grant you a credit card, loan or a mortgage, and if they think you have too much they might decline your application.
Get it corrected
Whenever you open a joint account or take out a joint application for credit with another person, you’ll be financially linked to them. You’ll be able to see who you’re financially linked to on your credit report, and their credit score might affect your eligibility to apply for further credit in the future. If you are no longer linked to that person– such as if you’ve broken up or got divorced – you’ll be able to contact the company who holds your report and ask for this information to be updated.
Next, you need to look for any incorrect information about debts you may have had in the past. These can include debts that you’ve paid off but that are not showing correctly on your credit report, any incorrect defaults, and any missed or late payments. You should be able to find the lender’s information on your credit report so you can contact them and ask for the information to be updated or corrected. This also applies to any bankruptcies, CCJs, or property repossessions that are showing on your credit report that you don’t think should be there.
You can only do this for missed payments or debt information that you believe to be wrong. If the information is correct and you’re concerned about it affecting your future ability to take out credit, there’s no quick-fix.
If you’re worried about previous missed payments and defaults that are showing on your report, don’t be too disheartened – they won’t be there forever. However, you may find borrowing difficult while they are. Make sure you don’t fall into any difficulties with your outstanding borrowing in the meantime and your report won’t be at risk of further damage. Once six years has passed since your last missed payment, and providing you have kept on top of your borrowing since then, you should find that you are in a better position to get accepted by lenders for the deals you want.
Checking your credit report doesn’t need to be tricky, and many services will offer you free access to it. Even if you think it’s time-consuming to go through your credit report diligently, just checking it once a year should be enough to pick up any major issues. Before you apply for a mortgage, you may want to check it more frequently, so if there are any problems, you’ll be able to get them rectified straight away. Any accidental errors on your credit report can be easy to fix, but if you don’t notice them or neglect to check, they could prove a real stumbling block even when you come to apply for a credit card down the road.
Disclaimer: All information and links are correct at the time of publishing.