What is a credit report and how can it impact your financial health?

Most of us have applied for a loan, credit card or mortgage over the course of our lives, but how many of us have seen the information that credit providers and banks use to decide whether to approve that credit? 

The information they use is contained in a credit report but, according to research, 46% of people living in the UK have never checked their credit report.  

What is a credit report?

A credit report is a summary of your credit history. Information in the report is used by lenders to confirm your identity and decide whether they will lend to you. 

The report contains details of your payment history for loans or credit from banks, building societies and credit card companies and those you are still paying. It can also include information from the likes of utility companies, mobile phone operators and major retailers.

Credit reports are compiled by organisations called credit reference agencies. There are three main credit reference agencies that supply credit reports: Equifax, Experian, and TransUnion. You can apply for credit reports from any agency but they may differ depending on the information that lenders share with each of them. 

What information is included in a credit report?

A typical credit report contains: 

• Personal information such as your name, date of birth, current and previous addresses, gender.  
• Public record information including bankruptcy, judgments, personal insolvency agreements.
• Details of financial links to people, usually through joint accounts, and the impact those links have on your ability to get credit.
• How much you currently owe on mortgages, personal loans, credit cards and other accounts.
• Past borrowing with your full credit payment for the last three years, showing if you have made your repayments on time and if you have missed or made late payments. 

Why is your credit report so important?

Your credit report is very important because it’s what banks and credit providers use to assess your creditworthiness before deciding whether to give you a loan or credit. So, it makes sense to pay more attention to your credit report to avoid any nasty surprises when you apply for a loan or credit. There are a number of reasons why it would be helpful to get a copy of your credit report.

1. Helps you stay on top of your financial health 

A credit report lets you monitor your financial commitments. It shows your outstanding credit commitments and any late payments you have made.  

2. Helps you monitor changes to your credit score

Your credit report includes a credit score based on a number of factors, including your payment history and debt. Credit reference agencies update their information every 4 to 6 weeks, so it can be useful to get a copy of your credit report on a regular basis to monitor changes to your credit score.

3. Helps protect you from identity theft 

Your credit report can help you discover if you have been a victim of identity theft by showing details of loans or credit that may have been obtained in your name without your knowledge. 

How can your credit report affect your finances?

Lenders and credit providers rely on your credit report to make a decision on whether to provide credit to you. If your credit score doesn’t meet the criteria, it's unlikely you will get the loan, credit, or mortgage that you are looking for. Those decisions could have a significant effect on your finances – and your livelihood.    

What to do if you find mistakes on your credit report

Credit reports are the foundation for organisations to make decisions about your creditworthiness so it’s important those reports are as accurate as possible. If you spot a mistake in your credit report, you should get it corrected as soon as possible to help prevent being denied credit in the future. 

You need to contact the lender or credit reference agency to get the report corrected. There’s no guarantee an error will be removed but if the lender won’t agree to fix it, you can add a ‘notice of correction’ to your file explaining why you think the information is wrong. 

How Norton can help   

It’s important to understand how vital your credit report is when trying to get a loan or any other form of credit. Many of us don’t pay enough attention to our credit reports and we don’t check them as often as we should, leaving us vulnerable to bad credit decisions based on mistaken information or the actions of fraudsters. 

With Norton 360 Advanced, there are now additional credit-related features to provide you with regular access to your credit report and credit score and to alert you if there are any major changes. 

• Credit Report & Score¹: If fraudsters gain access to your personal details, they can take money from your bank account or take credit out in your name. With monthly access to your Credit Report & Score, you can take the necessary steps to safeguard your financial reputation if you spot inaccuracies that may indicate fraudulent activity. 
• Credit Alerts¹: Get alerted when there are any major changes to your credit report, such as a closed account, missed payment or use of more of your available credit lines. If you spot something that you suspect is fraudulent or inaccurate, you can raise a dispute against it. 

¹ Norton Credit Portal features can be accessed following successful registration and verification.  Available to those over 18, who are residents of UK, IOM & Channel Islands.  Full Terms and conditions apply.  Norton Credit Portal features are provided by TransUnion International UK Limited, which is registered in England and Wales with company number 3961870 and is authorised and regulated by the Financial Conduct Authority under registration number 737740. Financial Conduct Authority authorisation can be checked on the Financial Services Register at www.fca.org.uk.