Credit Reference Files, Deconstructed

Virtually every adult in the UK has a credit score, but you might wonder a little more about these mysterious numbers. Just who generates them? The answer is simple: a credit reference agency. The score is a small part of what’s known as your credit reference file. If you’re used to the way the Americans do things, you might have heard of it as a credit report. There are three major credit reference agencies: Call Credit, Equifax, and Experian.

When you sign up for new credit, all a company has to look at is your word that you’re going to make the payments on time. Obviously, that isn’t quite enough. So the credit reference agencies keep data on hand about your purchasing habits. If you’re someone with good credit, it means that you pay back your debts on time and you don’t max out cards. You don’t engage in risky patterns that make lenders worried you have a high chance of defaulting on the agreement.

You need credit to buy all of the high ticket items that you probably have your eye on. A new car? Credit. A new house? Credit. A credit card? Credit! Even something as small as a personal loan is still going to require having some sort of credit history. This is the only way that companies get to know you. The bad news is that when you start out, you aren’t going to have a credit file. So you won’t get the best deals on credit. Still, it’s worth checking out as often as possible.

You want to make sure that you look at your credit report every year to make sure the information is correct. The credit report will list lines of credit you’ve had, as well as any judgments that you have listed.

There’s nothing wrong with being more diligent about your credit. If you do find errors, you need to make sure that you get the information corrected immediately. There is a difference between incorrect information and negative information that is correct. The credit reference agency cannot remove information that is correct, yet negative about you as a borrower. The best thing that you can do is flip the tables on them and fill your credit report with good credit lines. Paying on time is definitely a must. You cannot get anywhere fast if you aren’t doing at least that.

Now is the perfect time to get your credit back on track. While you might have to pay a small fee to see your credit scores, you should be able to pull your credit reference file from all three agencies for free.