You might be wondering what all the fuss is about, and why it's important to check your credit report and score. Your credit score (sometimes referred to as a credit rating) is a number that is calculated from your credit report to represent your credit history. The higher the number the better - if you have a higher score you will generally be viewed by the lender as being a lower risk when it comes to making repayments and be more likely to be accepted for credit and at better rates.
It's good to be in the know about what's in your credit report, and what credit score you have because it shows lenders how you handle your finances. By checking it, it will help you understand what information the lenders are considering when you apply for credit.
Still not convinced? Have a read through our list of reasons for why you should be checking your credit report and score.
Why You Should Check Your Credit Report and Score
1. To Get The Big Picture
Your credit report gives you a snapshot of all of your outstanding credit. From credit cards, loans and mortgages to your mobile phone contract and utility bills, you can see everything you owe in one place. This may also help you spot ways in which you can save money.
2. To Find Out Why You Have Been Rejected for Credit
Have your credit applications been declined? Have a look at your credit report and you can see the information that the lender is seeing when making their decision. Once you understand the reasons as to why you are being rejected, you can try to do something about them.
Have a look at our tips on How to Build Your Credit Score >>
By improving your credit score, you may find yourself in a position where you will be more likely to be accepted for credit and at better interest rates.
3. To Apply For The Right Products
Knowing what your credit score is can help you apply for the right finance for you. When you make a credit application, lenders request a copy of your credit history. This type of search is known as a 'hard search' and it is recorded on your credit report. Making multiple applications within a short time period can have a negative impact on your score. This is because it may give the impression that you are 'credit-hungry' and this can result in lenders not considering you for new credit.
By checking your credit report and score before applying, you will have a better understanding of your credit profile. This way you can help prevent multiple applications and rejections by only applying for products which are suitable for you.
4. To Spot And Correct Any Mistakes
Even a minor error on your credit report can have a negative impact on your credit score. Take a bit of time to go through your credit report to check all of the information is correct. If you do spot any incorrect details be sure to report this immediately.
At CreditKnowledge.co.uk we use TransUnion (formerly CallCredit) to provide you with your credit report so if you are member and you do spot any mistakes you can raise the issue via your account.
Alternatively, you can write to TransUnion (formerly CallCredit) at TransUnion, Dispute Team, PO Box 491, Leeds, LS3 1WZ. Please make sure that you include all supporting material (for example statements or letters from the lender involved).
If you find and fix any errors on your credit report, you may find that it increases your credit score and puts you in a better postion to get the best rates.
5. To Protect Yourself Against Identity Fraud
Checking your credit report on a regular basis can help in protecting you against identity fraud. By being familiar with your credit report, you will be able to spot anything that looks suspicious (for example credit applications that you have not made), and alert the relevant authorities and lenders.
Remember you can check your credit report whenever you like, and it won't have a negative impact on your credit score. Checking your report is only visible to you and the Credit Reference Agency, the lenders can't see this.
Why You Should Check Your Credit Report and Score - Key Points:
- To get the big picture
- To find out why you have been rejected for credit
- To apply for the right products
- To spot and correct any mistakes
- To protect yourself against identity fraud
Editorial Disclaimer: This article was updated 08/08/2022
Opinions expressed here are the author's alone, and not those of any bank, credit card issuer or any other company. This article has not been reviewed, approved or otherwise endorsed by any of these organisations.