The Ultimate Guide to Credit Reports

a guide to credit reports - ratewise
by UKCreditratings

A credit report is a very important aspect for every adult’s financial life as it influences almost all money-related decisions in your life. The more we grow up, the more we realise the importance of maintaining a good credit report.

Whether you are looking to get a credit card, get a new car, or get a loan for a new house; a credit report decides whether you will get the loan and what percentage of interest you will be charged.

The better results your credit report show, the lower the interest rate could be!

What is a credit report?

A credit report is a detailed explanation of a person’s credit history that allows lenders a glimpse at their financial responsibility level. 

It has information about how good you are at repaying loans, how much you are currently in debt, and how frequently you pay your bills.

All of this information is compiled into a single document. It’s basically like a CV for your finances.

What information is displayed in a credit report?

A credit report contains a person’s personal information such as home addresses, whether or not your accounts are shared with anyone, and whether your identity was ever used for fraud.

It also includes all of the credit cards and loan accounts under your name both open and closed from the last six years.

This report helps banks and other lenders verify your financial status and make an informed decision on whether to lend you money and most important of all, settle on an appropriate interest rate.

When do you need to check your credit report?

There is no bad time to look at your credit report, as it’s free and you can check it anytime you want.

If you’re planning to apply for a new credit card or get a loan, it might be a great idea to get an update on your credit report and prepare yourself.

Although it is recommended by many financial experts to keep regular track of your credit reports, so you never forget about making a payment and work on updating your credit score if it takes a hit.

How can you check your credit report?

Checking your credit report, nowadays, is easier than ever! Create an account with UK Credit Ratings to get a clear picture of your credit profile and maximize your opportunities to get loans and save money.

View the impacts to your credit file as often as you like. They’ll even help you keep track of how your score is shaping up. Now, anyone can check their credit reports right from home.

Advantages of maintaining a good credit report

Maintaining a decent credit report is no piece of cake, but it comes with its perks:

  • Interest rates is one of the biggest factors that are directly related to your credit score. A good credit score gives you the leverage you need to negotiate a better interest rate that works in your favour. In simpler words, you will always get great interest rates with a good credit report and end up paying very low amounts of interest.
  • People with poor credit reports are more likely to get turned down for new credit cards and loans compared to people with good ones.
  • People with great credit scores are very likely to be approved for higher credit limits.
  • Great credit reports can save you from paying security deposits! We all know how annoying and frustrating paying for security deposits can be. Well if you have a good credit report, you may not have to worry about it. People with good credit reports tend to get waivers on their security deposits when getting cell phone contracts.
  • A good credit report leads to cheaper auto insurance rates too.

What if your credit report is bad, how do you fix it?

Having a bad credit score can affect you financially, as it lets lenders know that lending money to you might be a risky move, which makes them charge higher rates of interest.

Also, you could easily be denied for your dream home, car, phone, and much more, having to settle for inferior products.

Although it’s a long process, it is possible to fix your credit report and turn it around. First, you have to start by paying all of your outstanding debts and never miss payment deadlines. 

Some credit rating suppliers like UK Credit Ratings will provide you recommended credit improvement actions within their portal, whilst providing you the functionality to dispute any credit errors which could also be bringing down your score. Although it’s difficult, it’s achievable.

Conclusion

A credit report is one of the most crucial factors in our financial lives currently. It’s might be surprised how much of an impact it can have on your daily life.

It can control important matters such as whether you get approved for loans or not. So, it is better to maintain a good credit report no matter what.

Hopefully, we have covered everything you needed to know about credit reports and now you have a clear understanding of how credit reports work and how important they are to you.

Get your credit report today!

Your credit score is an important part of your financial well being. We recommend visiting our friends at UK CreditRatings to get a FREE* report Instantly. You’ll be able to correct any errors and increase your chances of being accepted for a financial application.

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Categories: Personal Finance
Tags: Credit Report