Have you checked your Credit Report recently?

Did you know that your credit history may be harming your financial reputation without your knowledge. There are a few things you can do to improve the situation, even if you have made some serious mistakes in the past, you are still going to be able to repair the damage. It is recommended that you check your credit report on a regular basis even if you don’t require credit at the moment because a poor credit history can make it difficult to borrow money, get credit cards or a mortgage, or even get monthly contracts for a mobile phone or insurance.

Here are a few free credit report services you could use to start you on your road to recovery;

The main 3 credit agencies are Experian, Equifax and Call Credit. Each company you use to obtain loans, credit cards, mortgages, etc. with use one or more of these 3 to determine your eligibility.

Experian – Creditmatcher – This is a new free service that Experian (one of the top 3 credit scoring agencies) has set up. It is free but you’ll have to give them your card details for id verification.

Noddle – This is another free for life service run by Callcredit. Again, it is free but you’ll have to give them your card details for id verification.

Clearscore – This is the closest free site to map Equifax’s credit scoring system. Same mo as the others above with id verification

Now you can generate all 3 reports and a better understanding of how good or not so good your credit scoring and reputation is.

Understanding your credit score and report

If you have had problems with credit in the past, you may just assume that this history is going to be causing you harm. The problem is that until you have a clearer idea about the actual damage that has been caused, it is going to be hard to rectify the situation. So one of the first things you are going to want to do is look at your credit report – this document is basically your track record when it comes to using credit.

A credit report can be a bit confusing if you don’t know what you are looking at. It will have a list of your credit lines (sources of credit such as loans and credit cards), and your payment history in regards to this money you have borrowed. There is also a section called credit searches – if you have tried to borrow money in the last year, you can expect it to show up here as an enquiry (even if you were refused the loan). The credit report is also going to contain information that is on public record that could influence your ability to repay debts (e.g. a record of falling behind on child maintenance, bankruptcy, ccj’s, etc.).

One of the other things you are going to want to know is your credit score. There are actually a number of companies who provide credit scoring. The system used by Experian is fairly popular, and this would see a score of 881 to 999 as good/excellent. You want your credit score to be around the 700 mark, and if it is lower than this you need to take action to rectify the situation.

Repairing Your Credit

One of the first things you need to do when repairing your credit is to go over your credit report carefully to make sure there are no errors. Mistakes happen all the time, and you don’t want to be penalised for debt that has nothing to do with you. You also want to make sure that there is no evidence that other people have been creating debt using your name – if there are lots of credit enquiries recently. If you do find mistakes, you need to first contact the company that is responsible for creating it, most companies have a procedure for rectifying the situation. If you are unable to get the dispute resolved to your satisfaction, it is your right to add a note to the credit report explaining your side of things.

One of the best things you can do to repair your credit is to take action to improve your score. One of the ways you do this is by reducing the amount of money you have borrowed. You basically want to reach a stage where you have borrowed less than 30 per cent of the total amount of credit available to you. Always be careful about reducing your credit limit or getting rid of credit cards, because this makes it look as if you are using more of your available credit. It’s also not a good idea to apply for additional credit cards while trying to improve your credit score.

One of the important things to understand is that just because there is some bad stuff on your credit report now, it’s not going to make it impossible for you to get loans in the future. Even if there is something like a loan default on there, you can usually expect this to be removed within six years.