3 Reasons You Should Check Your Credit Report

Have you been putting off checking your credit report? It can be daunting especially if you’ve never done it before but here are our top three reasons to check and check regularly!

An image of a woman sitting on a credit report dial and a man with a bar graph.

1. It can help you take out credit

Most people don’t check their credit rating until they’re either trying to buy a house or take out a personal loan. A credit report is a record of your financial history such as existing debts, past debts, bill payments and more. It includes various forms of credit you may have such as; credit cards, loans, overdrafts, catalogues and any mortgage or car loan payments.

Top tip: If you’re applying for credit, make sure you check your score a few months in advance to avoid any nasty surprises!

Checking your credit rating doesn't affect your credit score and is considered a soft check. This means you can do it as often as you like and that can be important if you're dealing with debt problems.

Debts can stack up, leaving us feeling overwhelmed. If you’re struggling with several debts, you may want to consider an Individual Voluntary Arrangement (“IVA”). An IVA can be a great way for you to turn multiple debts into one affordable monthly payment.

Top tip: If your credit history is minimal, this can be detrimental to your score as there is limited information to prove you can pay it back.

2. It could stop you being scammed

One of the main reasons you should check your credit score when you’re not trying to apply for credit, is to make sure there are no mistakes. An error on your credit report could be costly if left unchecked. Aside from keeping on top of your finances, it also could flag any mistakes that are fraudulent and save you from later problems.

If you think something doesn’t look accurate, you need to dispute it by contacting the Credit Reference Agency (CRA) you used for the check. It’s best to do this as soon as you can as having something negative on your record that's not yours can still affect your ability to get a mortgage or any other type of loan.

Top tip: Make sure your address is correct. Having the wrong address on your credit report could mean you’re paying the price for someone else’s missed bills or payments.

3. It can improve your credit score

Regularly checking your credit rating means you’ll be able to see where you can improve your score, and a better score means you may be more likely to be accepted for a mortgage, personal loan and also get better interest rates on any credit.

Top tip: Not all CRAs use the same credit scoring system. Make sure you Google what your rating actually means.

If you’ve got bad credit, and are struggling to maintain your contractual repayments an IVA could be a viable debt solution. The good thing about an IVA is that it is not dependent on your credit score. An IVA will usually stay on your credit file for six years after the approval date. Once the IVA is complete you will be able to start to rebuild your credit rating and it should improve in the long run as you'll be in a better financial situation.

Check out our blog post: - Improve Your Credit Score With These Budgeting Tricks.