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Checking a Credit Report

Have you got a burning money question? Our expert Chris Eagle is ready to help. Email him at OurExpert@CreditChoices.co.uk

Q ~ Dear Chris,

I recently applied for a new store card, but received a letter from the shop a few days later saying they were unable to process my application because my credit report from Experian did not meet their eligibility criteria.

I wanted to know if I could look at my credit report, to see if there is anything wrong, and any reason why I may have been declined. How do I do this?

Many thanks,

Alistair Barbrook, via email

Tuesday 23 December, 2008

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On the subject of checking a credit report, our expert says:...

Hello Alistair,

Thanks for your question. Knowing how your credit report works, checking it regularly, and if necessary, working to improve it, allows you to correct anything that might be preventing you from getting the financial products you need.

My guide below will give you the basic low-down on credit reports, but for a more in-depth guide, download our Complete Guide to Credit Reports.

What is a credit report?

Credit reports are used by the majority of banks, building societies and loan providers to assist them in making decisions about whether or not to lend you money.

Credit reports allow lenders to predict the likelihood of credit being repaid by the borrower, and they are widely recognised as one of the most consistent, accurate and fair forms of credit risk assessment.

The credit rating system, carried out by a credit rating agency, allocates points based on the borrower’s credit history. These points are totalled to produce the borrower’s credit score. As long as the borrower’s score reaches a certain level, and they can meet other criteria set by the lender, most lenders will generally accept a request for credit.

The credit rating agencies

Credit rating agencies maintain records on an individual to assist banks, building societies and loan providers in assessing credit applications.

The three main credit rating agencies used in the UK by lenders are Equifax, Experian and Callcredit. They hold information about every financially active adult in the UK.

Click here for more information on credit rating agencies

Get your credit report

Under the Consumer Credit Act 1974, you are entitled to request a copy of your credit report. You can get your credit report by post, or instantly online:

• Equifax: www.equifax.co.uk (costs £14.95 a month)

• Experian: www.experian.co.uk (costs £7.99 a month)

• Callcredit: www.callcreditcheck.co.uk (costs £4 a month)

When you apply for a copy of your credit report, the credit rating agency you’ve applied to will issue, along with the report, details of what to do if you think your file contains any inaccurate information and what actions can be taken to correct this.

You can also write to each agency requesting a copy of your credit report, enclosing the statutory fee of £2, at the following addresses:

• Equifax: Credit File Advice Service, PO Box 3001, Glasgow, G81 2DT

• Experian: Consumer Help Service, PO Box 8000, Nottingham NG51 5GX

• Callcredit: Customer Service Team, PO Box 491, Leeds LS1 5XX

Although this is cheaper than getting your report online, you could be waiting as long as six weeks for the information. If you need to see your report immediately, it is worth paying a little bit extra and buying it online.

checkmyfile

Alternatively, you can log on to checkmyfile (www.checkmyfile.com) and sign up for their Triple Agency Report. This is your best option if you want to know exactly what all three of your reports say about you, and saves you £3.90, when compared to purchasing your three credit reports individually.

To check your credit report, I suggest…

Register with checkmyfile (www.checkmyfile.com) and buy their Triple Agency Report. No single credit rating agency can provide you with complete details of your credit history, because lenders tend to report your repayment history to just one, or sometimes two of the three agencies. Therefore, you can be rated very differently depending on which credit reference agency a lender uses when they carry out a search.

The Triple Agency Report from checkmyfile will provide you with information from all three agencies, letting you compare your credit reports.

Read our article, 10 ways to fix your credit rating, if you need to improve your credit rating.

For more information on checking your credit report, download our Complete Guide to Credit Reports.

I hope this answers your question Alistair!