We view a lot of credit reports at QuidMarket. Here we look at some of the things on there, what they mean and how you can view, monitor and, if needed, improve your credit score.
How to check your report
There are three main credit reporting agencies in the UK; Experian, Equifax and TransUnion. All will hold slightly different information about you and your previous borrowing history.
To view your Experian credit report, Money Saving Expert Credit Club allows free access to your report at any time.
Your Equifax credit report can be viewed using ClearScore – this is free for the first month, then you will need to pay a monthly subscription to view the information held on your Equifax report.
TransUnion use Credit Karma, again giving you free access to your TransUnion credit report.
To sign up, you will need your previous address details for the last 6 years, basic financial information and your employment details.
Once you’ve signed up, you can view details of all the accounts you hold and the companies that report information about your creditworthiness.
What should I check on my credit report?
Firstly, you need to make sure any accounts on there are accurate. Even small errors can have an impact on your credit score.
Go through the accounts on your report and make sure things like your addresses, payments and balances are all correct.
If you find a discrepancy, then you must contact the company as soon as you can to let them know to update or correct any information that is wrong.
You might come across credit accounts that you have forgotten about but are still paying for. Checking your credit report regularly gives you the opportunity to cancel any unwanted or unused subscriptions.
What do I do if my credit report is wrong?
Unfortunately, you may also find companies have been incorrectly reporting information about you. For example, you must check the repayment history on any accounts you might be marked as being in arrears or missing a payment.
Fight any incorrect repayment history on your credit file as this can significantly affect your credit score and your ability to get affordable credit in the future. The higher the deemed risk the higher chance you will pay more for credit.
How do I separate joint accounts?
The same also applies if you find any old joint accounts you need to be “financially separated” from. To do this, you can contact each of the three agencies and ask them for a “Financial Disassociation” form.
This just makes sure your ex-partner’s future behaviour does not affect your credit score going forward.
Bear in mind, the credit reference agencies can only de-link an account if you have done this first with the provider – for example, if you have a joint bank account with your ex, you will need to get this closed first of all. If it is a loan, this will need to be paid off before any names can be changed on the accounts.
Remember the same process will apply if you have just moved out of a house share for example and were splitting the bills, TV or internet accounts.
How do I improve my credit rating?
There are things you can do to help improve your creditworthiness. Money Savings Expert website has a great article with lots of tips. Here are some of the best;
- Check your report regularly – Negative information can lead to applications for credit being declined – check for any errors and have them corrected, find out if you are behind on accounts you may have forgotten about and get them into a payment plan or paid.
- Get on the Electoral Roll – Lenders can use the electoral roll to check ID so it can have an influence on their decision. To register yourself on the electoral roll, follow the instructions on the .gov.uk website and have your National Insurance Number handy.
- Stay on time with your payments – The most obvious one can have the most influence. Missing more than one payment can have a massive negative impact on your credit score, especially if they are within the last 12 months.
- Use eligibility calculators before applying – Every application you make leaves a footprint on your credit file. Too many and it might make it seem you are desperate for credit leading to companies declining your application due to the perceived increased risk. Where possible, use companies “soft check” eligibility calculators before applying as these will not leave a footprint on your file.
- Update your address on old accounts – If you have old accounts on your credit file that were taken out at a different address, make sure they are updated to your current residence. Having more than one live address on your file can be perceived as an increased risk to lenders.
- Don’t use credit cards to withdraw cash – Many lenders will see cash withdrawals on a credit card as bad money management. It is also more expensive as the interest is higher and charged separately to purchases.
- Go to the “How to Improve Your Credit Rating” article on moneysavingexpert.com – For lots of impartial information on how to improve your credit score head over to the Money Saving Expert website.
Only apply for what you need
Again, this sounds obvious, but only ever apply for what you need and can comfortably afford. It might be tempting when making a purchase to apply for the maximum amount. This might not be affordable and can cause serious money problems in the future.
If you do feel like you are experiencing money problems, have a look at our Help and Advice section at quidmarketloans.com.
Warning: Late repayment can cause you serious money problems. For help, visit: moneyadviceservice.org.uk