Every day, there are loads of people looking at some of the more attractive UK credit cards available – and wondering which is right for them. If this sounds like you, are you comfortable that you know enough about your credit report? There are many reasons why this is so important, but let’s start by taking a look at what it actually is.
A credit report is simply a record or a history of all the dealings you’ve had with lenders in the past. If you’ve taken out a personal loan or credit card, had a mortgage or even had a mobile phone contract, all the details of your relationship with the lender will be included on your credit report (also known as a credit history). On your credit report, you will find information on the type of credit you had, who provided it, when you had it, how much you borrowed and importantly – what repayments you made and whether you were late or missed any repayments.
Why is your credit report so important?
The information on your credit report, collected by credit reference agencies from a variety of sources, is used by lenders to decide whether to accept or reject you when you apply for a credit card or another financial product. It also helps lenders decide how much to lend you and what interest rates and other terms to offer you.
Why should you see your credit report?
There isn’t much you can do about your lending history, so you might think there is no reason to see your credit report. However, taking a look at your credit card is important for the following reasons:
- There may be mistakes or inaccuracies on your credit report which are stopping you from getting credit – spotting these and getting them corrected could improve your credit score
- Someone might have been getting credit in your name – this is identity fraud, and you might not be able to identify and stop it unless you see your credit report
- You will be able to get a better idea of the type of products you should be looking for when doing a credit card comparison and making an application – applying for products you have no chance of being accepted for (because of your credit history) can damage your credit rating further
How to access your credit report
These days, checking your credit report is very easy. All you need to do is contact one of the major credit reference agencies and ask to see your report – a small fee of around £2 may be charged, or you may be able to see your report as part of a free trial.