Credit Checks and how to play the system

 

Credit Checks

A credit check is the process carried out by a prospective lender to find out about your credit history and your current credit standing. In other words, how risky you are as a borrower.

What is the purpose of a credit check?

How is a credit check done?

Certain information about you and any existing credit agreements is held by a credit reference agency and any company wanting to make a check on you will make a request for the information. The main UK agencies are Experian, Equifax and Call Credit.

The credit reference agency will hold the following information about you:

The lender will assess you on the basis of the information obtained. This determines whether you will:

How can you repair a bad credit history?

How can you obtain your credit report?

If you are interested in getting a copy of your credit report, you can apply to an agency such as Experian, Equifax or Call Credit. They are obliged to send you a copy of your own credit report (for a small charge) within 7 working days.

These agencies let you order your credit report over the internet. For a higher fee, you can also see your report online.

Further information

You can check your credit record with one of the following three credit reference agencies:

These agencies provide a range of credit reporting and monitoring services – check their websites for further details of what these services provide and cost.
It is important to keep a good history as this information is kept on file and is retrieved each time you apply for credit or enter a contract with monthly payments e.g. mobile phone contract. A good credit history essentially means that you are a low risk individual to lend money to and more likely to be successful in acquiring credit history.

Practical tips on keeping a good credit history

Further information

You can check your credit record with one of the following three credit reference agencies:

These agencies provide a range of credit reporting and monitoring services – check their websites for further details of these services and costs.