Why you need a Credit Report
When it comes to financing the finer things in life (as long as its in line with what your tax estimators say), whether that’s a new wardrobe, a car, the latest grooming products or anything else, from time to time we all sometimes need some credit. But before applying for a credit card, loan or any other kind of financial product, it makes sense to get a free credit report before you apply.
If you’re thinking of applying for credit, there are several reasons to find out more about a free credit report first.
For example, with a free credit report, you will learn about the information held about you in your credit history, and understand how likely your application is to be accepted, especially if you’ve previously made several applications within a short space of time.
Equally, a free credit report is a useful thing to have ahead of big life changes such as move or a new job, since prospective landlords and employers could run checks on your financial history before hiring you or giving you a tenancy.
At the same time, you will have peace of mind that only accurate information is held about you. This is especially important in a world where, unfortunately, identity theft and fraud are on the rise. Getting a free credit report gives you the chance to spot any errors or suspicious activity, and put them right. It can also help you move forward so that any past issues don’t affect your ability to gain credit in the future.
Yet another reason everyone should take the time to manage their credit score with a free credit report is that credit rating has expanded to affect more areas of life than before, so it’s not just about loans, mortgages or credit cards. Your credit history can also have an impact on things like car insurance, mobile phones and having a regular bank account.
Here are some extra facts that will help you fully understand your credit report:
- There’s no universal blacklist – each lender ranks people individually; so if you are turned down once for credit that doesn’t mean you can’t or shouldn’t apply again.
- It’s also worth understanding that you should try and build up a credit history as well, to give potential lenders more information about you as they try and predict your behaviour. Equally, while you may think an unblemished track record of always paying credit card bills off in full would count in your favour, a credit report is also about whether you will make the lender money. So hard though this may be to believe, a credit card company may even reject you for that reason. The most profitable borrowers are those who meet the minimum repayment each month but are always in debt.
- Contrary to popular belief, there are plenty of things that don’t go on credit reports – so lenders don’t know about every aspect of your life. These include parking fines, council tax arrears and student loans (unless you started uni pre-1998), current salary, savings, who you’re married to or living with and whether you’ve checked your own credit file.