A credit score is an acknowledgement of your past payment behaviour. You cannot borrow money unless a lender peruses your credit report. It gives too much information about your financial comportment. While your current income proves your repaying capacity, it does not reveal how much debt you already owe. Therefore, lenders take stock of your credit rating too.
In order to avoid ugly surprises at the time of borrowing money, it is enjoined that you check your credit file. You know that there are three credit reference agencies – Experian, Equifax and TransUnion from whom you can contact for a free copy of your credit file once a year, but there are about more than 15 ways to check your credit rating in the UK. It could be confusing to choose the right option to check your credit score.
Do not assume you have a single credit rating
Many borrowers presume that there is central data with all their credit records, but the fact is that there are three credit reference agencies responsible for maintaining your credit score. They are Experian, Equifax and TransUnion. Each credit reference bureau records data that your lender sends to them. On no account are all lenders obligated to inform your account of all credit bureaus. They may report your data to one or two agencies, and therefore, each agency has different credit records and different credit scores.
When you apply for a loan, your lender will fetch your credit data from any of these agencies. They do not bother about the score calculated by credit reference agencies. They emphasise credit records instead. They use their own formula to calculate your credit score.
Ignore the marketing hype that one credit reference agency is better than the other. None of the credit bureaus are the most trusted. They are neither more accurate nor better. They simply record information reported by different lenders, and there is a high likelihood of errors in their reporting.
Each credit bureau will let you access your credit report free once a year. Normally, you apply to any of them to get your credit score, but you should check your credit report with all agencies to get the full picture.
It is likely that you do not find all credit information on a report from one agency. If that is the case, you should always try to contact another agency. Make sure that you check your report with all three agencies because you cannot get to know which one your lender would contact. Whether you want to apply for a mortgage or loans on benefits with bad credit, you should stay updated about your credit details and score.
Check your credit score for free
There are three credit reference agencies which maintain your credit file, and they are all responsible for providing you with a free statutory credit report. They are plain and easy to understand. You can download them without any hassle. If you find any error or unidentified accounts in your credit report, you can even dispute that error, which will be resolved within 28 days. Accessing a statutory credit report before applying for a loan so you do not end up with high interest rates. Here is where you can access your credit report free of cost:
· Statutory reports but no scores are available from all credit reference agencies – Experian, Equifax and TransUnion – and they are free of cost.
· A free Experian account gives you only a score but no credit details free of cost.
The list of free scores and credit records
· ClearScore and CredAbilitylet you access your credit score and details free of cost. Both ClearScore and CredAbilityfetch data from Equifax.
· Credit Karma, Credit Monitor, Totally Money, and MSE’s Credit Club also give you free credit score and credit information. All these platforms acquire data from TransUnion.
Reports that require you to pay
· CheckMyFile – A UK-based service that combines data from all three credit reference agencies called Experian, Equifax and TransUnion to give you a credit score. The fee is £14.99.
· Experian and Equifax credit reports will cost you up to £14.99 and £14.95,respectively.
· CreditScore, which fetches data from Equifax, will cost you £9.95.
· Scores Matter, UK Credit Ratings, Student Credit Checker, and Credit Score Pro collect data from TransUnion. Scores Matters costs you £19.95, while the other three platforms charge £24.95.
Things you should know about these credit bureaus and platforms
Credit platforms make so many claims, such as helping you improve your credit rating. Your chances will become better to qualify for lower interest rates if your credit rating is perfect. The tips you receive from them are more or less the same on all credit reports, such as:
· You should pay all your bills on time. On-time payments will prevent your score from going down. Bills include not just debt obligations but also rent, energy bills, and the like.
· Use your credit card responsibly. Your credit utilisation ratio should not be more than 30%.
· Have your name registered in the electoral roll.
You will hardly find any credit report better than the other. All agencies record information that your lenders report to them.
Another claim that these agencies and credit score service companies make is that they help you resolve problems. They all claim that your credit information could be disputed if you think it is wrong, but this is solely a marketing bluff. The fact is that all credit score service companies and platforms fetch details from different credit bureaus. They simply send complaints to agencies, and then credit reference agencies send those complaints to your lenders, who are only supposed to report whether the information is accurate or not.
This route cannot be effective to have erroneous details removed from your credit file. You should rather directly contact your lender if you have any complaints. If you struggle to have your record corrected, you should go to the Financial Ombudsman Service company.
Adhere to your obligations
You do not have to much worry about your credit rating if you adhere to your obligations since starting. Whether you take out a small emergency loan or a large instalment loan, make sure you pay off the debt on time. Bear in mind that not all loan payments are reported to credit reference agencies. For instance, payday loans are not reported unless you make a default. It means they cannot help build your credit score despite on-time payments, but they can deteriorate your credit rating if you do not discharge them on time.
As far as it is about the credit score that credit reference agencies calculate based on information they have, lenders do not need it. They only rely on credit information and use it to calculate your credibility based on their formula. It is up to lenders which reference agency they will contact to acquire your credit information. It is always recommended that you borrow money wisely and pay it off on time.
The bottom line
You can get a free copy of your credit report once a year from all credit reference agencies. However, there are some credit score service companies that let you access credit data and score without any fees. Some platforms do charge fees as well.
