Debt: Why it is important to check your credit report

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If you are suffering from a debt problem, it is imperative that you make an immediate start in not only getting your debt under control but paying it off as soon as possible. One of the most important things that you should do first however, is to obtain a credit report which you should scrutinize in detail. Why? Well, often these reports can have inaccuracies and it is your responsibility to find these and make sure they are corrected as they can adversely affect your credit rating.

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But how do you get a credit report? Many companies in the United Kingdom will supply you with a credit report for free once per annum. If you want to see it more regularly than this, you will need to pay for their services. Companies such as Experian, Equifax, and Call Credit all provide a service such as this. These companies are required by law to allow you to access your credit report for free once every year.

Other than looking for errors in your credit report, what else will you find?

Your credit report contains…

There is a multitude of information to be found in your credit report. Let’s take a closer look.

  • Details of your credit accounts

The first thing you will notice in your credit report is a list of all your credit accounts that you have opened in the last six years. This includes any type of loan (mortgage, vehicle or personal), credit cards as well as credit accounts such as a clothing retailer. There is much detail to be found here including payment history, missed payments, penalties and whether you paid off any accounts in full. If you have even been declared bankrupt it will also be reported here. Note that if you have any joint credit accounts with business partners or your spouse, they will also be found here.

  • Details of your current bank account

Your credit report also contains any details of banking accounts that you use presently.

  • Voting information

Your credit report contains details of whether you are a registered voter on the electoral roll or not.

  • Personal details

All your personal details are listed. Check them to make sure they are correct.

  • Other details

Finally, your credit report has a host of other information including your current address and others where you have lived and whether you have ever been convicted of fraud.

Your credit report does not contain…

The following will not be found in your credit report.

  • Your salary (past or present)
  • Your criminal record or lack thereof
  • What religious group you belong to

So who else can access my credit report?

Most people think that only banks will access their credit reports. This is simply not true. Should you apply for a credit financial product, the provider in all likelihood will start with your credit report to see if you are a viable customer for their products. In other words, that you will repay instalments on time. For example, if you take out a mobile phone contract, the service provider will look at your credit report. Believe it or not, even a landlord might choose to see how reliable you are in terms of making repayments if you want to rent a new home.

Ok so now I know what to expect in my credit report, how often should I check it?

Although knowing your credit rating is important, there is certainly no need to check your credit report every week or even every month. A good rule of thumb is to check it at least once an annum or just before you are going to apply for a credit product in the form of a credit card, vehicle finance, a mortgage, a personal loan or even when opening a clothing account or taking out a mobile phone contract. Remember, if your credit report is poor, there is no point in applying for a loan product that will never be granted to you. If you do this too many times and are rejected, it can actually affect your credit report in a negative manner.

When you do check it however, be sure to look for any mistakes that may have been made. For example, any accounts that you have paid off but still reflect as open on your credit report.