Your credit report can tell you a whole lot about your financial history. Most lenders will look at your report when they are deciding whether or not to approve you for a loan, as well as some landlords, employers, utility providers and even mobile phone companies.

It is generally recommended to review your credit report every few months, so you can check that the information is accurate and assess your financial health. When you have a good credit score, you will be offered better interest rates and higher credit limits from lenders, so it is important to understand your credit history and how this impacts your score.

Read on for our step-by-step guide to reading your credit report.

Get a Copy of Your Own Credit Report

The first thing you need to do is to get access to your credit report from at least one of the three main credit reference agencies in the UK: Experian, Equifax or TransUnion. These agencies collect lots of information about the borrowing and payments you have made. Usually, lenders will check a report from one or more of these agencies when you apply for credit.

You can look at your report online via the agency’s website or through a service that gives you free access. Once you get it, just save a copy or keep the page open so you can go through it slowly and carefully.

Check That Your Personal Details Are All Correct

Start by checking the personal info section, which lists your name, current address and previous addresses. Lenders use this information to confirm your identity and make sure they are looking at the right personal and financial information.

Double-check that everything is correct. A typo in your address or a different name can be confusing for lenders who look at your report.

You might also see some information about being on the electoral roll. Being registered to vote at your current address can help lenders check that you are who you say you are, and can help your credit profile, too.

Go Through Your Credit Accounts

Next, take a closer look at the accounts section. This lists all of your past and present credit agreements, including credit cards, loans, overdrafts and mobile phone contracts.

Each account entry should show the name of the lender and the account balance, as well as the credit limit (when applicable). You will also see a record of how you have been paying back your debts. Check that the accounts listed all belong to you and, if you spot one that you don’t recognise, get in touch with the lender ASAP.

Check Your Payment History

Your past account history is essentially a record of how good you are at managing debt and making payments on time. All regulated consumer loans in the UK require some form of creditworthiness check and lenders can put a lot of weight on this when they are deciding whether to lend to you.

If you see any unexpected late or missed payments, you can ask the lender to look into it. You should also check that any closed accounts show up as such and display a balance of zero.

Look Over The Credit Searches

Finally, the last section of your report usually shows all the times that lenders have checked your report (which is usually every time you apply for a loan, credit card, mobile contract and so on).

If you need to apply for lots of credit, it is worth spacing out your applications, so lenders don't get the wrong idea about you.

Taking the time to read through your credit file can help you spot any mistakes and work towards improving your record. The more comfortable you get with the information on your report and the more you understand credit scores, the better equipped you will be to make smart financial decisions.

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