Credit Reports
Credit Reports or Credit Files as they are often reffered include what is known as an individuals credit score. Checking and understanding your credit report is important to know about for managing your chances of getting credit and at a good interest rate, and also to check that you have not become a victim of identity theft or fraud.
Free Credit Reports
Free credit reports are avaliable from most providers as part of a free trial membership. Click here to get a free copy of your credit report (UK based).
The offers differ from time to time, but at the time of writting (02/2011) most are a 30 day free trial which allows people to see their credit report and check their credit score for free. Once a member has checked their credit file they either need to cancel their membership within the trial period, or the membership would then continue.
Most credit file membership companies, offer full access, monitoring and alerts of any changes that happen to a credit file. This monitoring and alerts service is important to help protect individuals against the risk of ID fraud or theft. So if someone takes out a free trial and continues, the membership is then helping to keep an eye out for indentity theft or fraud.
What is your credit report?
Your credit report or credit file is a document which basically profiles your financial history normally over the last 6 years or so.
It includes your credit score, which in the UK is a number between 0 and 999 (0 being the lowest and 999 the highest). Your credit score indicates to lenders how credit worthy you are, based on previous credit, if you repaid on time, if you defaulted, if you have CCJs etc. The higher the credit score in theory the lower the risk you are to the lender, which should mean your more likey to get credit and at a lower rate of interest when compared to someone with a lower credit score.
After your credit score, the credit file will then go onto list your personal data including but not limited to:
- Current and previous address over the last 6 years
- Alias (other names you are known to lenders as)
- Linked people – family, partners etc
After this the credit file will then display all the credit accounts held in your name, these can include but not limited to:
- Bank accounts
- Credit Cards
- Loans
- Mortgages
- Car Finance
- Catalogue accounts
- Store cards
It is important to check your credit file and what is held on it for two different reasons, 1) To check ensure you are paying of all your genuine debts and 2) To ensure you have not been a victim of identity theft or fraud.
Reason 1 should explain itself, checking your credit file so you are 100% sure you are paying off all the debts that you have personally taken on. If you fail to pay off a debt, then this will effect your credit file as it will shows as defaults or missed payments.
Identity Theft or Fraud
Reason 2 is what a lot of people don't realise they can do. As your credit file lists every single item of credit held in your name, your credit report is probably the only place where you can check to see if someone has ever cloned your identity and taken out credit in your name.
By this it means get a copy of your credit file, and look at what is held in your name. If there is some form of credit account registered against yourself (loan, credit card, mortgage, finance package etc) and you don't recognise it, then it could be indentity theft. At this point it is important to contact the company you have seen the credit report through, most of them will be able to advise you the best way to deal with whatever has happened on your credit file.
Click here to get a free copy of your credit report (UK based).
