With the utter turmoil of the current worldwide financial climate, even more difficult to come by. But many people don’t realise the importance of why to check a free credit report from one of the major credit reference agencies.

Without knowing it, your credit report might be presenting data that may hinder your ability to take out more credit. Some of this may not even be your fault. Worse still, it may even show that you have been the victim of identity theft!

Those people that have been rejected after applying for credit should certainly request their credit report data from at least one of the major credit reference agencies, such as Experian. If you have been declined credit, ask the lender who refused you which of the agencies they were using when they credit vetted you and their contact details. Then write to them requesting a copy of your credit file.

It is also well worth asking for a copy of your credit file before applying for more credit so that any errors, or omissions, can be corrected before you apply. This could prevent a rejection, which would also be recorded on your credit file and might count against you in further credit applications.

If you don’t already know how to check a credit report for yourself, then it is very easy to do. The major credit reference agencies will offer a free service if you write to them and ask them for the file information and there are many online services doing the same. As an early identity theft detection method, you can also join schemes whereby you are notified when certain changes happen on your credit reference file. This would warn you to sudden huge loan applications if someone was trying to clone your identity.

The free credit reports don’t tell you exactly how the lenders will score you, but they give you a good basis for reviewing what they are likely to be taking into account. In addition, lenders will take into account other questions that they ask, such as your history with that lender, your annual household earnings and other details they ask you to include.

Your credit report shouldn’t have information for anyone else included within your house, but it will have details of who the credit reference agency assumes are financially related to you, for example husband or wife. If this information is invalid, then it can be worth getting it corrected.

As an example, if your partner doesn’t share the same surname as you, but has a better credit rating than you, then you can possibly improve your credit rating by reporting yourselves as being financially related.

On the other hand, if parent and non-dependent child, or others sharing a surname, live under the same roof and aren’t financially related, it is worth checking that you are not being marked as having a financial relationship, in case they have a worse credit rating.

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