Giving yourself credit where credit’s due

Banks, building societies and other lenders swap information about your financial details to make sure you are someone who pays their bills on time so they are not risking losing their cash if they lend to you.

All this information is collected in three main databases in the UK and lenders typically ask for one or more of your credit reports from these suppliers when you apply for credit or a loan.

Before deciding whether to lend to you, the lender will consider your credit report, application form and other information that might consider relevant, like you income, and give you a credit score.

Your credit score varies from lender to lender as they all have their own methods of calculating how much of a risk you are as a borrower.

If you are looking at borrowing a substantial amount, like for a mortgage, then it makes sense to review your credit report to make sure no inaccuracies have crept in that may lower your score and perhaps cause the lender to refuse your application.

Obtaining your credit report

The three main companies that collect your financial data are:

Callcredit

• http://www.callcreditcheck.com/

Equifax

• http://www.equifax.co.uk/Products/credit/credit-report.html

Experian

• http://www.experian.co.uk/

You can apply to each company for your credit report. Costs vary depending whether you want an online version or a printed copy sent to your home, but are usually around £2 or a bit more. Check out the pricing at each site before application.

Cleaning up your credit profile

Different lenders add or subtract points from your final credit score. Some of the main point winners and losers are:

• The Electoral Roll
  If your name is not listed at your home address, contact your local council and ask them to add you. Lenders confirm your address and the time you have lived there from the electoral roll.

  The council will send your details to all three credit agencies within 28 days so they can update your record.

• Check for mistakes
  If you’ve paid a bill but your credit report shows you still owe the money, contact the lender and ask them to put their records straight. The lender should pass any corrections on to the credit agencies for you.

• Court judgments and decrees
  If you have paid a county court judgment (England and Wales) or a decree (Scotland) against you for failing to settle a debt, make sure your credit report confirms you have paid in full.

To correct an error, contact the court that made the judgment with your case reference and ask for the court record to reflect your settlement. If the court agrees, the amended record is forwarded to credit agencies with 14 days.

Follow the same procedure if you believe a CCJ or decree is wrongly registered against you.

• Bankruptcy or sequestrations
  If a bankruptcy order or sequestration is annulled or discharged and is not shown on your credit report, send a copy of certificate to each credit agency for updating your record.

• Duplicate credit searches
  If a lender has searched your details more than once for the same one credit application, ask them to delete the additional searches.

  When you apply for credit, your credit record is searched and recorded. If a lot of searches in a short time, this can reduce your chances of borrowing.

Searches stay on your record for 12 months from the date of the search.

• Inaccurate linked addresses

If you have been linked to addresses or other people incorrectly, you can ask the company who made the link to delete the information.

Your address details are collected whenever you open an account – for instance with a mail order company or catalogue.

If other people who live in your home are recorded on your report, you can ask for these to be removed as long as you do not share any joint accounts or tenancy of the property with that person.

• Notice of correction

If you feel you want to explain an entry on your credit report in more detail, you can write to the credit agencies and ask them to put a notice of correction against an entry.

Summary

• Three main credit agencies collate data from all the UK’s banks, building societies and credit companies so anyone you ask for credit can see an overall picture of your financial circumstances.
• You can apply for a copy of your credit report from each of these agencies
• If you think the report contains errors, you can ask the credit company or court to amend their records.
• You can also post a notice of correction on your credit report if you feel an entry on the credit report does not correctly reflect your circumstances.