How and when to check your credit score and credit report?

Representative Example

Total amount of credit £80, duration of the agreement 29 days, rate of interest 292% per annum (fixed), total amount payable (in one repayment) £98.56. Representative 1281.8% APR.

Now that we have explored the world of credit reports it is time to examine how and when you should go about checking your credit report and score, including when applying for online loans.

All three Credit Reference Agencies have a compulsory obligation to provide copies of a credit report when requested by an individual or any third-party authorised to access said credit report. Soft-copies are usually available online by visiting the agencies website. Hard-copies are also available when requested via phone, email or post, but usually come at a cost e.g. admin and postal fees. Further information on this can be found online.

Some agencies provide free access to credit scores via their website or a third-party provider. Continuous full access to your credit report however can prove costly, whether it be a one-off, monthly or annual payment. This too can usually be accessed via the agency's website or a third-party service.

Links to all three CRA websites can be found below:

There are various subscription-based memberships available to access real-time information about both your credit report and credit score. These subscriptions may include on-demand customer service agents that have direct access to your credit report and credit score. They can provide advice, allay any concerns and offer insight into a credit report within a mere couple of minutes. Subscription-based or any form of paid access to your credit information is not always necessary and you should always consider the usefulness and need for such information.

The content of an individual's credit report will vary between each CRA. Credit providers rarely report to all three CRAs which means that the information used to compile a credit report will vary between each CRA. For example, where a credit card provider only reports to Experian, that credit card debt will only appear in a Experian credit report and not a TransUnion or Equifax one.

The variable nature of information between credit reports could mean that it is worth requesting reports from all three agencies to cover all bases and obtain a better outlook of your actual financial health. However, this could prove to be quite a tedious task. Therefore, depending on the reason behind obtaining a credit report, you can gather information to make a selective decision as to which credit report to request.

Before you go ahead and check your credit score and/or credit report make sure you understand how each of the CRA's operate in regards to the services they offer and fees that they charge. You can do this by finding out more via their websites or contacting them via phone or email to see what fits best with your financial needs. No one wants to pay for a service that they never wanted or no longer require.

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Alongside knowing how to access your credit report and score it is crucial to identify when such information needs to be accessed. When applying for any form of credit, large or small, assessing the information contained in a credit report can prove particularly useful. By being aware of the information that will potentially be used by a creditor to make a lending decision, borrowers are able to form realistic expectations about their financial future.

Poor credit reports and scores typically result in a lower chance of being granted credit. However, bear in mind that providers differ in their risk profile i.e. the amount of risk they are willing to forego to provide credit. Some creditors are therefore more willing to lend to those with poorer credit reports or scores. With that in mind it is always worth checking with a credit provider before making any borrowing decisions.

By periodically accessing your credit report and score, you will be able to have a better outlook of your financial health and analyse both the positive and negative aspects of how your credit is being managed. This may help you find ways for further improvements in the future. Requesting access to credit reports does not negatively impact on your credit score or rating so doing so periodically should not cause any detriment.

When considering financing for the purchase of a large asset e.g. a new house or car, checking your credit information can only prove beneficial. No one wants their potential credit provider to spot any defaults, late and missed payments or anything else that will result in a funding application being declined.

When preparing to rent a new property, checking your credit information can be important as it could give you an inclination as to whether you are likely to require paying a relatively higher or lower deposit on the property. A lower credit score may mean a higher initial deposit as the landlord or property manager will likely view you as a higher credit risk, whilst a higher credit score could therefore imply a lower deposit.

Should you have had any fraud related incidences or suspicious activity on your credit card or credit accounts, checking your credit report will identify the impact that this has had on your financial standing. Credit providers or credit card issuers should always be contacted as a matter of urgency in such instances to help mediate and resolve the incident.

In cases of an upcoming major expense such as a family holiday or wedding, checking credit information in advance will enable you to see which type of credit provider will be most suited to your needs as well as who you will most likely be accepted by.

These are only some of the more common reasons one would request access to their credit reports. It is always advisable to carry out further research as individual scenarios may vary. All three CRA's offer advice on how to access and improve your credit score and credit report so make sure you check out their websites for more information.