24 Jan 2020

What is a credit report?

Nearly every adult in the UK has a credit report. If you’ve ever opened a bank account or had a mobile phone contract, you’ll have one. But what exactly is a credit report and how do you find yours? Let’s take a look at the essential information you need to know.

Credit reports – the basics

A credit report is a historical record of all your financial behaviour. It’s just like your CV, where all your previous work experience is listed in chronological order. Each new financial product you open is a new line on your credit report. This includes current accounts, utilities, mobile phone contracts, credit cards, loans, mortgages and other financial products. The credit amounts will all be listed, and the information is updated at least monthly.

Credit reports don’t include student loans, parking or driving fines, council tax arrears or savings account. They certainly don’t include any details relating to your medical history, criminal record or current salary.

However, your credit report will include all of the essential information about you. For example, your current and previous addresses, date of birth and details of anyone you share accounts or financial products with.

As well as records of credit you’ve held and payments you’ve made, your credit report also notes times when you haven’t kept up with repayments. If you miss a payment or a deadline, the report will flag it up. If you’ve ever had a County Court Judgement (CCJ) made against you or been declared bankrupt, it’ll be on your credit report. The same goes for home repossessions and defaults.

Another important fact to know is that there is no one definitive version of your credit report. There could be as many as three slightly different versions, depending on what information lenders share with the major credit reference agencies.

All of the information in your report is used to give you a credit score. Positive things like paying on time will boost your score, while missed payments and CCJs will drag it down.

How far back does a credit report go?

Your credit report will stretch back for a number of years, giving an overview of your financial history. The good news is that negative entries such as missed payments don’t stick around forever. Defaults, late and missed payments only stay on your credit report for up to six years. For other types of information, it depends. For example, accounts that were paid on time and satisfactorily closed could stay on your report for longer than six years.

Even better, lenders don’t necessarily rely on old data when deciding whether or not to approve your mortgage or credit card. If you missed a payment five or six years ago, it’s less important to lenders compared to more recent information. This is excellent news for people worried about getting credit in the future as it means that there’s not long to wait before their credit score can improve.

How do I check my credit report online?

Your credit report doesn’t have to be a mystery, known only to prospective lenders. In fact, now that GDPR has come into effect, you have a legal right to access your credit report without paying anything. It’s a really good idea to keep an eye on your credit report and make improvements if needed.

It’s easy to check your credit report online. Here’s how it works:

Choose one of the main credit reference agencies in the UK – Equifax, Experian or Transunion. Many offer a free 30-day trial, so you can see even a very detailed report without paying a penny. You simply need to go to the agency’s website, sign up for an account and start your free trial. You’ll enter some basic information and you can then access and even download your credit report.

There’s a myth that checking your credit report too regularly can harm your credit score. Luckily, that’s not true. You can and should access your report as much as you need to. It’s a really good idea to check a few months before making any applications for mortgages or credit cards. By being aware of problems in advance and taking action to improve your credit score, you can minimise your chance of rejection.

You can also seek expert help if you need more detail on anything in your credit report, or you spot a mistake or a problem. If there is a mistake, it’s crucial to get it corrected before it harms your credit score.

It could be that a default has been mistakenly put on your account, or there’s a problem with a joint account. You could even be a victim of identity theft or fraud. Go over your credit report with a fine-tooth comb, making sure that all the information really does match your financial history.