How To Check Your Credit Report For Free
Your credit score is the key to accessing affordable finance from a bank or mainstream lender for a mortgage, loan or credit card. This guides aims to explain everything you need to know credit scoring and how you can check your score for free.
Understanding Your Credit Score
- The score is a numerical value that is determined by the main three Credit Reference Agencies in the UK which are Experian, Equifax and Call Credit.
- Your credit score can go up and down depending on your financial status and how well you are keeping up with your repayments.
- You instantly get a credit score when you turn 18 and will start on zero. Once you start using credit such as loans and cards, you start to build up a score. For young people, it is common to use credit builder credit cards specifically for this.
- The higher the credit score the better. Experian uses a scoring system of 0 to 999 whereby: poor (0 – 560), poor (561 – 720), fair (721 – 880), good (881 – 960) and excellent (961 – 999)
- Your credit score is made up of different factors including your repayment history (35%), the amount you owe (30%), length of credit history (15%), new credit (10%) and types of credit (10%). It will also show any joint applications or accounts that you might have with your family or spouse.
Why Do You Need To Check Your Credit Score?
The majority of lenders will be reviewing your credit score during a loan application including mortgages and guarantor loans. Other services may also look at your credit rating including mobile phone contracts and store cards. The loan vendor or provider will check your score by reaching out to one of the three main credit reference agencies and they will usually pay a small fee to look at your file. As proof that they have looked at your report, they will typically leave a ‘credit search footprint‘ on your file.
So before applying for a big loan, it is good to know where you stand in terms of your credit rating. You want to be in the best financial position possible to maximise your chances of approval. You may find that there are some simple things you can do to improve your credit rating such as paying off some credit cards that you do not use or repaying some loans off early if you have the means to do so. You may also find that it is beneficial to distance yourself from a spouse or family member that you have a joint account with if they have bad credit.
Furthermore, it is good to check that you have not missed any repayments without knowing it. Any failed payments due to expired cards or whether it be the fault of the lender will cause your credit score to fall and you do not want this.
With a paid subscription, you are given an email and SMS update every time a company looks at your credit file. This can confirm any applications that you are making. Also if you have ever been a victim of fraud, it is good to receive alerts in case someone is using your details and making purchases without your knowledge.
There is no damage for checking your score regularly and with a paid subscription, you can check it as often as you like.
How Much To Check Your Credit File?
The MoneyAdviceService explains that all of the three main credit reference agencies have a legal right to provide you with a one-off credit report upon request for just £2. This can be accessed online or you can request a hand copy by post. This report will give you a snapshot overview of your current credit history and include your score, recent transactions, your address, whether you are on the electoral roll and credit that you have open.
The credit score providers Experian (CreditExpert), Equifax (ClearScore) and CallCredit (Noddle) all offer free 30-day trials and can also provide you with a basic report for free every month. Although this is free, it will give you limited information and then they will make money if you use their services to apply for a loan or credit card.
Originally, the credit reference companies only made their money by charging lenders to access your account during an application. They still do this but a few years ago, the idea of consumer credit management emerged so that they would start charging individuals to access their account information. Whilst free trials are available, you can continue to pay up to £14.99 per month and this will allow you to access the report whenever you want and get alerts whenever there is a change or transaction.
To save on your costs, you could potentially ask for a £2 report from each agency just once a year. However, you will not know if anything suspicious is happening or if your score is going up or down during this time.
If you are a savvy shopper, you can also use cashback sites and receive £3 to £10 for a free trial and then just cancel after the first month. This is actually possible and a way that you can spin the whole thing on its head and actually earn money instead of paying for your information. This is perfectly legally and has been cited by MoneySavingExpert.
Do I Need To Check All Three Credit Reference Agencies?
Yes, this is beneficial because each will have different information from different lenders or vendors. In terms of limiting your rejection and maximising your credit score and chances of being accepted for a loan product, it is good to cross reference the different agencies. As mentioned, you can always receive an one-off report for £2 or use a free trial to limit your costs.
Our personal recommendation is to use Experian if you are going to pay for any service because they are the most advanced in the credit checking industry.