Free ways to check your credit score
Your credit score can be an important indicator of your overall financial situation. It takes into account various credit accounts, public information, your addresses, and other information about your financial activity. They are often used to determine if you're eligible for a particular line of credit. This can include loans, mortgages, and credit cards.
It can sometimes be beneficial to check your own credit record. Doing so will enable you to find out the status of your financial health. It will also give you a grasp on how potential service providers view you. In this article, we look at some vital information about credit scores, and how you can check yours for free.
What is your credit score?
A credit score is a compilation of your borrowing history, as well as other personal information, that gives a numerical representation of your financial position. Lenders look at these scores in order to determine how suitable you are for their products. The higher your score, the better your chances of being approved for credit.
In the UK, there is no universal credit score. Credit reference agencies such as Equifax, TransUnion, and Experian compile these reports. However, different lenders will have different systems in place for approving customers. Equally, your score will likely differ between reference agencies.
The terms credit score and credit rating are often used interchangeably. The score or rating you get will determine the types of loans, finances, and credit cards you can get, as well as the amount of money you receive. A credit report goes into more specific details.
A poor credit rating can mean that you will only be offered high-interest rates on loans and credit cards. Lenders want to see that you're a good borrower. Late or missed payments can affect your score. If you haven't borrowed before, this may also negatively impact your rating.
What is included in your credit report?
There is a lot of information about your financial history in a credit report. These details come from a range of sources, including banks, credit card companies, and building societies. Other data comes from the electoral register and utility companies.
We've listed out the key information that a credit report includes
Your details such as your name, address history, and date of birth
Whether or not you are on your local electoral roll
The amount you currently owe to lenders
Details of your previous late payments on credit cards or loans
Information on any missed payments on current or prior accounts
Whether you have any County Court Judgements made against you
Details on any past home repossessions or money owed on housing
Whether you've been declared bankrupt
Although this is a lot of data about you, some pieces of information don't appear on your credit report. Information such as current savings and account balance, salary, criminal record, student loans, and council tax arrears are not included. It's important that you know what will and won't affect your score, and who will look at it.
Who looks at your credit score?
Credit reference agencies will hold onto your data and release only to companies
with a legitimate reason to see it. Usually, this will be when you're applying for some form of credit.
Below are some of the institutions that may be able to request to see your score:
If you're applying for a new account, they may check your credit history to see whether or not you're a risk.
Part of your application for a mortgage will involve a credit check. When combined with other data about your situation, they will then decide whether you're a suitable borrower.
Credit card or loan companies
When you apply for a loan or credit card, the lender will check your score. If you have proven to be a reliable borrower in the past, they're more likely to give you credit.
Gas and electricity providers will often use a credit report to see how reliable you are at making payments. If you have a poor score, you may not be eligible for an account that's charged in arrears.
Other institutions and companies may also be able to request your credit report if the situation arises. These include mobile phone companies, letting agents, potential employers, and government agencies.
Why should you check your credit report?
Quite a bit of information appears on your credit score, but you may be wondering why you should check it. There are a few good reasons to do so. Most importantly, it allows you to see where you stand financially. It's important to know what your fiscal health is like, particularly if you're thinking about applying for credit of some form.
Building a good credit score takes time, so by viewing your report, you can see where you need to improve. It also allows you to spot potential errors in the report that could be negatively affecting your score.
How to check your credit score for free
You have the legal right to check the information that companies have on you. Previously, it used to cost £2 to check your report. However, since the introduction of GDPR laws in May 2018, you can now check for free. It's possible to check with each credit reference agency, as detailed below:
Experian. The largest of the agencies and a commonly used service by lenders. You can sign up for a free 30-day account with Experian but will have to pay monthly after that. It costs £14.99 after the free trial. A membership will give you daily access to your credit report and credit score, as well as suggest ways to understand and improve your score.
Equifax. Much like Experian, you can sign up for a 30-day trial of the Equifax monitoring service. This will give you access to your credit score and report. It aims to give users and understanding of how their credit worthiness is, and what is impacting their ability to get credit. There is a monthly fee of £7.95 after the free month.
TransUnion. TransUnion used to be called Callcredit. You can access your score with them using their Noddle service, which will also advertise credit cards and loans you're likely to be accepted for. Noddle is the UK's first 'free for life' credit report service, meaning you won't ever be charged for the service. Reports generated by Noddle give quite a lot of detail and history, making it easy to identify areas for improvement. Reports are generated every 30 days.
ClearScore. ClearScore allows you to sign up to see your credit score and credit report for free. These reports are updated monthly, and you can check them as often as you like. It's a particularly useful service as checking your score won't have a negative impact on it. Users can also check up to 6 years' worth of their financial details with a thorough explanation.
Money Saving Expert Credit Club. Another free service on offer is the Money Saving Expert Credit Club. This service gives you access to your Experian credit score, as well as an overview of eligibility for certain cards and loans.