How To Check Credit Reports for new loans

By Contributor • Nov 29th, 2008 • Category: Credit

Check Credit Reports

If you are about to apply for a mortgage, loan, new credit card or any other form of credit, then you might have sensibly decided that it is time to get a free credit report. With loans so difficult to come by at present, this certainly is a good and welcome move and could potentially avert the disaster of being refused in error.

credit report

Image by TheTruthAbout... via Flickr

But do you know how to check credit reports and realise it is very easy and free? If you have been refused by a lender then the first step is to write to the credit reference agency that they used asking for a copy of your report. Then check the report and get any errors corrected.

It is far better though to do the check before applying for the credit – close the sable door before the horse bolts! Credit reference agencies allow you to check your report online and there are many systems about that will give you regular updates as things change on your credit report.

If you are just wanting to check you report in advance of taking out credit, then the free trials are usually sufficient. Quite quickly you can have access to your credit information and see the data that the lenders will be looking at as part of their decision process. Some reports will even give you an approximate indication of your credit status.

On top of the report, the potential lender will also consider your income, which the credit report will not show. This means that it is only an approximation, but it will show you any nasty surprised, such as loans that you forgot you had missed payments on last year.

Once you have seen your credit report file and checked it, you might have found slight errors in the report. In this case you have to write to the lender that provided the information and ask them to amend their records. Once they have done this, they will then update your credit report.

It is also possible that there are searches recorded on your credit report you are not aware of. These are recorded every time a potential lender views your report in order to decide whether to lend you money. If some of these are not familiar to you, it is worth checking them out. If there are a lot of these, or for a lot of money, then be very careful with your checking as it can be a sign of identity theft.

Information will stay on your report for typically at least 6 years after it completed. For example, loans that are paid off, county court judgements and arrears will show for usually around 6 years. Searches, where a lender has looked at your report, will only usually show for about 12 months.

Read also about interest free car finance and auto financing.

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