Credit Report Pitfalls

what to check and what to avoid

There are a non-exhaustive number of issues that you should contemplate when you consider the health of your credit score because it can be difficult and time consuming to repair a credit rating that has gone wrong.

Always ensure that your personal details are kept totally up to date and ensure that you are on the electoral register (registered to vote).

If you choose to check your credit report regularly (annually), you can view any possible discrepancies or errors that may have occurred and challenge them as soon as possible.

Make sure that you do not break any credit agreements if at all possible because any break of the agreement will be documented in your credit report. Consider that a missed payment for a TV subscription could be a contributory factor in your mortgage application being turned down.

Do not overstretch yourself in terms of applying for credit as you may miss payments, but at the same time, you will need to demonstrate to lenders that you have taken credit previously and have repaid responsibly and on time. If you have never taken credit before, a lender will not be able to make an informed determination as to whether you would be able to manage the credit and may decline your application.

If you have applied for credit and been turned down, it would be wise not to reapply immediately to another lender as each time you are turned down for credit it may negatively impact your credit score. Instead, consider applying for a free credit report from Experian and attempt to work out the reasons for your being declined or alternatively ask the lender why they declined you. By checking your online credit report you may be able to repair the problematic area and then seek to apply for credit again.

If you make a joint application for a mortgage for example, you are then tied to the co-applicants credit score and this could affect the credit score on your own credit report, either negatively or positively based on the other persons credit score.

Do not close or terminate an account where a payment is due (no matter how small) as this missed payment may appear on your credit report for a further 6 years. Therefore, try to ensure that all payments have been made prior to closing an account.

CHECK YOUR FREE ONLINE CREDIT REPORT FROM EXPERIAN

For more detailed information on credit reports see our additional articles on the subject -

Credit reports - an introduction.

What is in a credit report?

What is credit scoring?

How to improve a credit rating

Understanding your credit scoring

GET YOUR FREE ONLINE CREDIT REPORT FROM EXPERIAN

Any information offered here is general and should be considered as purely informational in nature. Information here should not be construed as advice and it is offered without legal responsibility or liability. It must be emphasised that you should consult a professionally qualified individual or company (such as an accountant, financial adviser or solicitor for example) should you need advice on your financial situation, as they will be able to tailor their advice to your situation accordingly.