| The most common question we tended to
receive over the years was from individuals asking for a credit status enquiry on
themselves. Such an enquiry would require a credit search to be carried out, and this
would leave a 'footprint' on the individuals credit file. The My Credit Report service provides a neat and fast
solution. Credit Report Agencies
Your credit report presents the information that is held by a credit reference agency on
your credit file. Before granting credit or extending a loan or other facility, lenders
may check your credit report to help them decide whether to approve your credit
application and if so, at what rate of interest to charge you.
Your credit report can list your existing and recent
credit accounts and reveal whether you make your repayments regularly and on time and in
full. There can also be other information which can assist lenders to assess whether you
appear to be a potentially reliable borrower and whether you can afford to take out more
credit. The data held on your credit file can also include details of any CCJs - country
court judgments - which have been registered against you for non-payment of debts. If you
have been declared bankrupt this and individual voluntary arrangements are shown.
The credit reference agencies also use the electoral roll
to show if you have registered as a voter at your current address. Before granting credit
lenders like to check this as a precaution against fraud and to make sure that you live at
the address you have given on your credit application. Your credit report can also list
other people with which you have joint or shared financial accounts, credit cards, loans,
or mortgages. The details of their credit report do not appear on your credit report, but
lenders may run a separate credit check on these people as they are financially connected
with you.
The information collected to compile your credit report
comes from public records, such as county court records and the electoral roll showing
your address, and this is supplemented by credit information from lenders. This type of
information is sometimes called 'shared user information'. The lenders sometimes agree to
contribute information to the credit reference agencies so that together the information
can be accessed by them to help prevent fraud. Some lenders only share adverse data such
as missed credit repayments, while other lenders choose to provide both negative and
positive information such as your all your regular repayments.
Only you are allowed to access your own credit report.
Lenders are allowed access to run a credit check on your credit history but they require a
license to access your credit report and even then, they can only access it when you have
given them consent. This consent is often included as part of the credit application form
you are asked to complete and sign.
Before deciding whether to accept your credit application
lenders use credit reports to assess whether potential borrowers appear to represent a
reasonable credit risk, and also how they appear to approach credit and repayment. Lenders
will also want to assess whether you already have more credit than you can comfortably
repay. To calculate the likelihood that you will keep up with your repayments the lenders
take the information in your application form and combine it with the data in your credit
report, then they allocate each item a value. This is called credit scoring. The lenders
can then use their own formula to calculate a credit score. In most cases the higher your
credit score the more likely it is that you will be accepted for credit. You don’t
have just one single credit score because every lender uses their own formula for their
calculations. When you get your credit report, the credit agency may also include their
own credit score as a guideline. This may not be the same score you would get with a
lender, but the credit agency score can give a broad indication of the overall credit
status you appear to merit based on the information within your credit report. Lenders
however would have more information upon which to base their credit decision, such as the
information you provide in your credit application form, and if you already have an
account with the lender they can refer to the information they already have about you on
their records. The credit report will then be used to supplement this information. |
Credit Report
How to improve your credit
status
