Free Credit Report

Consumers in the UK are to have the opportunity to get a free credit report once a year. The new website annualcreditreport, which launched on June 2, 2006 gives people online access to credit information held about them.

This is the information used by lenders when you apply for credit. It helps them to make lending decisions based on your track record of borrowing and repaying loans. First, it allows them to decide whether or not to grant you credit and if so, to set the rate of interest and the credit limits.

The better your credit history, the better deal you'll recieve. But if you pose a risk to their cash, they won't lend, or if they do, will cover the risk by charging you more interest.

The Credit Reporting Agency who offer this free online service have stated that all UK consumers will have the option to access their credit report once a year. The report will cover both your current and previous addresses.

One of the major benefits of this project is that it will make people more aware of the financial information held about them and how it relates to the credit that they receive. It is also hoped that it will reduce the amount of errors that exist on credit reports.

Demand for this new free credit report service is expected to be high as until now many people have been discouraged from requesting a copy of their credit record due to the small fee charged by the various credit reference agencies.

Okay, so that's the news. But how will this help you?

Well, first it should encourage you to take a look at your credit record once a year. It won't cost you anything and as it's online your credit information should be quick and easy to access.

Take a look at your credit report and make sure that all the information is correct and gives an accurate view of your borrowing history.

If there are any errors (for example any indications that you missed a repayment or haven't repaid a loan in full) you should take steps to have these "black marks" removed from your record. The cleaner your record is, the better deals you'll be offered, which could be helpful when refinancing to reduce your debt.

And if it's not possible to remove information from your record you should make sure that a note is added explaining the reason for that information appearing on your record.

Checking your record will also make it harder for anyone else to steal your identity. If any suspicious addresses or unexpected changes appear on your credit report they should be investigated further. Although identity theft shouldn't cost you any money, if your credit rating is damaged it could have some undesirable long term effects.

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