From time to time financial journalists stray into the area of tax. Today I am straying a little and putting on my accountant hat or friend hat in giving you some sensible advice about credit reports.
When you apply for a credit card, mortgage, car loan/HP or other financial product there may be a credit check done on you with one of the credit reference agencies. The decision in your case will be based on what they learn there. The question is…is the information correct?
Getting a copy of your credit report is simple, cheap, and a good idea for most people. It’s a good way of spotting identity theft and avoiding various problems from festering.
Online this costs just £2 per person, with some free options. Try www.experian.co.uk and click ‘£2 statutory credit report’. Have to hand your name, date of birth, current address, and any previous addresses over the last six years, plus a credit card or debit card in your own name. Takes about 5 minutes maximum. You will then be posted or emailed your Report.
It is important that once you have your report you check it carefully. Sometimes there can be things on your report which are truly nothing to do with you. I have known clients to have a car HP on their account which was never theirs. Missed payments would then reflect badly on the client. This can happen for a number of reasons, only one of which is identity theft.
If your credit report has things which are wrong then you must correct them. The credit agency will have details of how to do this. You may have to satisfy them that the debt has been cleared. At worst all you may be able to do is put a note against your credit report that you dispute a particular part, and why you dispute it.
My wife and I have done this and I commend it to everyone – worth doing every year or so – just to ensure there are no surprises.
Check your credit report once a year to ensure nothing incorrect gets onto it which affects your chances of getting a mortgage or HP for a new car.