No more paying for credit reports!
Posted on: 24 August 2011 by Laura Wilkins
Great news! Brits who sign up to the Noddle, the new service from CallCredit, will be able to view their credit report whenever they like at no cost.
Most financial institutions use one of the two major credit reference agencies, Equifax or Experian, and anyone is legally entitled to see the information each company keeps on them. Many people currently pay to receive monthly credit reports, as agencies offer free membership trials which charge after 30 days if users fail to cancel. CallCredit offered this facility on a smaller scale until recently, and the new Noddle service is expected to be available from September.
According to Noddle, Britons spend an unnecessary £22 million a year on monthly subscriptions they didn’t realise they had to pay for. Noddle also notes that one in five of those surveyed struggle to unsubscribe to the service, with 59% unable to find details on how to cancel. In addition, 32% encountered unhelpful customer services when attempting to cancel.
Martin Lewis, MoneySavingExpert.com creator, says: "It's great to hear people will be able to get their credit reports online for free without jumping through hoops, though worth noting Callcredit is the least used agency, so it's still important to check files at Equifax and Experian.
The jargon and terminology behind credit can often get confusing. If you’d like to find out more about your credit and how you can improve it, here’s a guide to keep you up to speed:
Credit reports are a summary of your financial reliability - listing any loans, credit card accounts, overdrafts, graduate loans and store cards you have, or any other form of borrowing you have done. Records will show your initial balance, your current balance and your payment history. It will track how regularly you make payments and will show if you have missed any monthly payments on any form of finance. It will also record any court judgements against you, for example if you have failed to pay your council tax, and whether you have been made bankrupt. Records are generally kept for six years and whenever you apply for a credit card, loan etc. the company you apply with requests a copy of your credit report from agencies such as Equifax, Experian or CallCredit.
This is a statistical analysis of the risk you present to a potential lender, drawn from your credit record. The higher your score, the less of a risk you are. The score is made up of a number of factors, including your credit record. However, not every lender uses credit scoring and many lenders will also assess applications based on other factors as well as a credit score. A poor score can limit your ability to borrow money or reach your financial goals.
Improving your score
Since your credit score can influence your financial opportunities and can even affect your ability to buy a home and get a job, it’s well worth trying to improve your score and repair bad credit. Here are five tips that could help you:
- Make sure you’re on the electoral roll: This is one of the key factors credit reference agencies look at. If there is no public record of where you live, your score could fall.
- Pay your bills on time: If you have a good track record of making payments, you will be more attractive to lenders. Likewise, if you have a history of missing payments, or defaulting on debts, fewer firms will be prepared to lend to you again.
- Open a higher than average interest credit card: for which you are more likely to be accepted. Make sure you manage it properly to help rebuild your credit rating. This means repaying every month in full, spending a little each month for six to twelve months. For most credit cards, this method will only work if you just use your credit card for purchases. It is important to make sure you make your payments on time and stay within your credit limit or otherwise it will have a negative effect on your credit rating.
- Check your credit file: Unfortunately, sometimes mistakes do happen, and occasionally fraudsters may try to use your details for their own gain. Make sure the details the credit reference agencies have for you are accurate.
- Close unused accounts: If you have a credit card or bank account that you no longer use, close it. You are much more likely to forget to contact the company when you move house, or notice if cards or statements go missing, which means you could become a victim of fraud as a result.