Reading Your Credit Report

Everyone knows that credit reports are important, they’re a way for any lender to see, in a matter of seconds, what kind of borrower you are, and how likely you are to meet up the repayment obligations of any credit agreement.

This, of course, means that you should know what’s in your credit report so you never get stuck with any unpleasant surprises. The big credit companies like Experian offer credit checker options to customers so they can stay on top of the contents of their credit report. However, being able to see your credit report is one thing, knowing what to do with it is altogether different.

Sticking with the Experian example, your credit report will contain eleven lines of information. The first few will be about you, and these are relatively easily changed. Sometimes credit reports can get confused by incorrect entry of a name, or an address, or you may have moved house.

So, scroll through your credit report and make sure that each name and address is correct and up to date (another famous example of names messing up credit reports is when you get married). Changing this information is easy enough but the process will vary slightly with each credit company.

You may, if you’re very unlucky, find credits under your name for money you haven’t borrowed, in this example you may be the victim of identity fraud and should contact your bank before anyone else.

Below this personal information will come information about the type of credit that you’ve got, and then the amount of money that you still have to pay. If that number reads £0 it’s probably worth deleting the credit entry as it’s only clogging things up.

Next you’ll see your credit status for that particular entry, what you really want is everything to be green. Yellows are acceptable and reds are very bad news indeed. Look through everything carefully and make sure that what is written on the entry is accurate, if you haven’t missed a payment and the report says you have, challenge it, it could be important.

Good advice is to check your credit report at least once a year, and before applying for any big amounts of money like a personal loan or a mortgage, you want to make sure that your credit rating is 100% accurate, and if you think there are negative issues on your rating, make sure you challenge them and get them fixed.