Credit Report And Ratings: The Most Frequently Asked Questions


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Credit Report And Ratings Frequently Asked Questions (FAQ)

Read the most frequently asked questions about credit report and ratings; see the answers, compare quotes and find the best deal to suit you.

What is a credit report?

A credit report, often referred to as a credit file, is a record of your financial history. It is compiled by one of the three major credit reference bureaus: Equifax, Experian and Callcredit; your record will be used by various third-party agencies, including banks and mortgage brokers.

Lenders will check a credit report of someone applying for a loan with one or more of these bureaus and agencies; this will happen each time you apply for a credit card, loan, mortgage or other financial product. It helps the lender to judge you financially fit enough to offer credit.

By paying a one-off or monthly fee to an agency or bureau, you can check a credit report yourself. Find out more in our beginners’ guide to credit reports.

What is the difference between a credit report and credit score?

A credit report contains factual information regarding your financial history; although this will not be given a rate or a score, there are some report providers who will do that.

A universal credit ‘score’ does not exist. Each time you apply for credit a lender will score you according to their own criteria or rules; you might be turned down for credit with one lender but it’s worth trying another where you could be more successful.

Should I check a credit report?

It’s a good idea to do this because checking a credit report can assist in finding any problems related to your financial record; it will highlight products you may be accepted for. It might also help explain any failed applications; from this it might demonstrate to you how you can correct this and improve your rating.

Are all credit report agencies identical?

It is standard thinking that the three self-powered bureaus mentioned here will offer a more realistic and efficient information path than third-party agencies. All will offer different services, prices and standards of customer support.

Your credit report will only illustrate the credit you have applied for – it will not give facts about the success of the application.

What sort of things are included on a credit report?

Whenever you make an application for credit, the information will be held on your credit file. This creates a picture or history of your financial activity. The typical items it will show are:

  • Your name and address
  • The amount you currently owe to lenders
  • Whether you are on the electoral roll at your current address
  • Any late or missed payments on credit cards and loans
  • Joint financial products and linked accounts, for instance a mortgage between partners
  • County court judgements (CCJs), repossessions, bankruptcy and individual voluntary arrangements (IVAs)

What is not included on a credit report?

None of the following will be on your file; although there are often rumours that circulate about some of these, you can dismiss them as untrue:

  • Savings accounts
  • Council tax arrears
  • Balance of your current account
  • Parking and driving fines
  • Student loans
  • Criminal record
  • Race
  • Number of children
  • Medical history

If a lender asks you any questions about any of the above on an application form, this is acceptable; he may do so on the basis of your answers affecting a decision on whether or not to loan to you.

Does a credit report give information I have been turned down for credit?

No. it will only highlight the products to which you have applied for credit – it doesn’t say whether or not your application was successful.

However, it will show the existing credit products you have in your name; therefore if you have applications which are not backed up by a live credit account, lenders will most likely assume you have been rejected for credit.

How long does information remain on a credit report?

Different type of information stay on your credit report for varying amounts of time. Credit application searches will remain on your file for a year. However, the maximum length of time any negative information should remain on your file is six years.

Are you aware…?

  • A credit blacklist does not exist and there are things you can do to improve your credit score

Can I correct any errors on my credit file?

There is a legal requirement for credit report agencies to review any issues you raise.

How can I create a credit history?

Any item that will indicate you can handle a credit account can help you to build a worthwhile history of credit.

This could be a credit card or loan; it may even be something as simple as a mobile phone contract.

How do I know if my address been blacklisted for credit?

This is not possible. Credit records are affiliated to people, not addresses; there is no such thing as a credit blacklist. Make sure you update the electoral register with your new address as soon as possible in order to keep your credit file up to date.

What sort of things negatively impact a credit score?

  • Frequent changes of address
  • Late payments on any credit deal
  • Too many credit applications in a short period of time
  • You are not listed on the electoral roll (you can register online)

What are the ways in which I can improve a credit score?

Ways to improve a credit score could be items such as:

  • You can contact credit report agencies and explain the items listed on your file to correct them
  • A good credit history will illustrate by example you can meet repayments
  • You are named on the electoral roll

You might also find the following of interest:

    • Credit builder cards
    • Basic current accounts
    • Midata
  • Staying a long length of time at the same address
  • Not maxing out credit facilities such as credit cards
  • Closing down accounts that you no longer use
  • Closing joint accounts with negative credit records in them.

 

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