How can you access the information that credit reference agencies hold about you, and how often should you do it? In this first of two parts on credit files we’ll look at these basic questions and next time we’ll look at what you can do if your credit file needs brushed up a bit.
Who keeps the information? There are three credit reference agencies in the UK today – Equifax, Experian and Callcredit. If you haven’t checked your report before, or perhaps haven’t checked it for some time, then it does no harm to obtain references from all three agencies.
Is it free? All credit reference agencies have a statutory obligation to provide you with your credit report for a fixed fee of £2. You can access your report online or ask for a written copy. Be aware of credit agencies that ask you to pay a regular monthly amount for unlimited checks. You might be paying more than you need to pay. It will often look like a free service, but they will charge you after 30 days, even if you don’t access your file.
Will I get an actual ‘score’? Some credit agencies may offer to provide you with a credit ‘score’, the thinking being that the higher the score the better chance you have of being accepted for loans and mortgages. Just be wary of spending money on something that is subjective. We’ve already said that different lenders interpret the information they receive from credit agencies in different ways.
How often should you check your report? If you are applying for a mortgage, loan or credit card then it doesn’t do any harm to check your credit report, especially if you haven’t done it for a while. You can check it as many times as you like and it won’t affect your credit rating.
Is it true that making too many applications can be bad for my credit score? There are lots of urban myths around about the consequences of applying for too many, or too few, loans. Some people reckon that too few applications mean you will be refused credit because you have no history, while others reckon that too many applications will lead to refusal because you are applying for too much credit. The truth is probably somewhere in the middle. It is also the case that if you are only getting a quote for a loan you can ask the lender to do a ‘quotation search’ rather than a full search and this won’t show up on your report.