Instant access to your credit report

With credit card, loan and mortgage providers becoming more choosy about who they’ll lend to it’s more important than ever to know what information is held on your credit file. The good news is it’s getting easier to access that information.

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Individuals can now access their statutory credit report online for just £2, thanks to an agreement between the Department for Business, Innovation and Skills and the three major UK credit reference agencies: Experian, Equifax, and Callcredit.

Meanwhile, both victims of identity fraud and people who are classed as financially vulnerable can view their reports free of charge.

Consumer Minister Edward Davey said: "All consumers now have easier access to their £2 statutory credit reports, which will help them take better control of their finances."

What is a credit report?

Credit reports allow you to monitor your financial commitments by viewing, for example, what credit commitments you have outstanding and any late payments you have made.

It is important to know what it says as the information held on your credit report will affect your ability to access mortgage or credit card deals in the future.

All lenders use data from at least one of the above agencies when assessing your file, so if the information is inaccurate you risk being rejected through no fault of your own.

And even if you have a perfect credit score and no desire to take on further borrowing, there are still benefits to checking your credit report regularly as it can help you to nip any fraudulent activity in the bud.

Here, we explain the reasons for keeping on top of your credit history, whatever your financial situation.

I have a good credit score. Why do I need to check my credit report?

While Britons with flawless credit scores may feel they do not need to access their credit report, regular check ups are still a good idea.

Not only can keeping an eye on the information the credit rating agencies hold help you to quickly iron out any errors, it is also an important step in the fight against financial fraud.

And that's not the only advantage. Credit reference agencies' sources include the Elecoral Roll, court records and banks' data on your account payments and transactions.

However, over the last couple of years, many credit card companies have also started sharing data on whether you have a promotional deal, for example. It is therefore worth keeping an eye on this as it could result in you being turned down for a 0% deal because you regularly jump from one 0% card to another – even if you have a perfect payment record.

Meanwhile, if fraud is your main concern, then signing up for a regular monitoring service can prove a good option as it allows you to keep up to date with changes to your file.

Check out our credit monitoring channel for more details.

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I have a fair credit score. How can I improve it so that I qualify for the best deals around?

If you are not already listed, then perhaps the easiest way to improve your credit score is to sign up to the Electoral Roll. Those not eligible to vote – because they are foreign nationals for example – should also ensure this is not working against them by sending all the credit reference agencies proof of residency and asking them to add a note verifying this to their files.

Stability is seen as a plus by lenders, so staying with the same employer, bank and at the same address for a while all help.

And on that note, check that the address the agencies have for you is up to date on all your accounts as having more than one can stymie credit applications.

Other things that can have a negative impact on your score include generating lots of searches on your name by applying for lots of financial products in a short time, while getting rejected for credit is also bad news.

However, the best way to rebuild your credit score is simply by managing your accounts in a way that ensures you never miss a payment or go over your credit limit.

When repaying credit cards, for example, the simplest method is to set up a Direct Debit to repay the full – or a set - amount each month.

I have a poor credit score. What steps should I take to improve my situation?

Poor credit scores are not only reserved for those who have defaulted on debt payments in the past: having no history of borrowing can also result in you being rejected by lenders because they have no track record to judge you on.

Meanwhile, being “financially linked” to someone with credit problems can also result in your file being tarnished by association.

If your partner has a poor credit score, it is therefore a good idea to keep your finances completely separate.

Other steps to take include paying off any outstanding debts as quickly as possible, cancelling unused credit cards and accounts to slash the amount of credit you have access to and taking out a credit-building credit card - as long as you then behave like a model customer.

Cards of this kind include Barclaycard Initial at 29.9% and the Capital One Classic and Progress cards at 34.9%. Try our card builder tool to search for the credit card you're likely to be accepted for.

Finally, if you are struggling, remember that changing your repayment schedule is preferable to defaulting, so you should contact your lender as soon as you realise you will be unable to meet your commitments.

And don't be afraid to seek help from a specialist debt adviser if you are really in trouble. Visit our debt solutions channel for details of companies offering debt management plans.

Please note: Any rates or deals mentioned in this article were available at the time of writing. Click on a highlighted product and apply direct.

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