Free Credit Score: Basic Useful Information
With all this talk about a recession and the doom and gloom of the economy, it occurred to me that I have no idea what my current financial situation is. I am getting to the age where mortgages, kids and responsibilities are not far away so taking an interest in my credit rating would is very worthwhile, especially as I still have some time to improve it before I start shopping for mortgages.
Your credit rating can be referenced by anyone or company who intends to lend you money of some sort. This could be for a simple Payday loan, car finance or secured loan but it could also be for mobile phone contracts and other long term contracts to ensure you have the means to follow through with the contract.
Those with a poor credit rating will find it difficult to receive loans from the bank as according to their records, you may struggle to pay their loan back hence you are a risky person to lend money to. If on the other hand you have a proven record of borrowing and repaying loans, banks will be all too happy to lend you money as your credit history states, you usually always pay back the money you borrow. Having a healthy credit rating is very important when it comes to taking out a mortgage to buy a house as this is one of the largest loans you will ever take out within your lifetime. Before you start shopping around for mortgages it is a good idea to find out your credit score, and if possible, find ways in which to improve it.
Thanks to the internet, finding and learning about your credit score is exceptionally easy to do thanks to services such as Equifax and Experian which you have most likely seen advertised on TV or within your email inbox. These credit scoring services connect to the same databases that are referenced by the banks when deciding whether they should lend you money or not. Before you start shopping around for mortgages and other loans, your first port of call should always be checking your credit score.
Getting a free credit report from Equifax is a piece of cake. I first visited their website (equifax.co.uk) and followed the links to my FREE CREDIT REPORT displayed on the home page. The application form from Equifax was a lot easier to complete than I first thought. It asked the usual questions such as my name and address in addition to my bank details. They didn't ask for difficult information such as my National Insurance number of bills that are within my name which was a pleasant surprise as I certainly don't carry that information around with me. It is important to note at this time that although the Equifax credit score system is effectively free, they will charge you £6.99 per month, every month after the first 30 days. As we are only checking our credit report, there is no harm in taking the free service for 30 days before cancelling the subscription before you get charged the first time just remember to do so otherwise you will be charged. The Credit Expert service works in a very similar way but instead of charging you £6.99 per month, they charge you £16.00 so be sure to cancel your subscription before the 30 day trial ends to ensure you do not get charged for this FREE service. Another important thing to take into consideration is the time the report is generated. Equifax's service is instant which means as soon as you signup, your personal credit report is available for you to view. If you go with Credit Expert, you will most likely have to wait three days before it is generated.
Whether you decide to you Experian or Equifax for your free credit report, you should receive roughly the same information and is a summary of information held on you by credit agency companies such as well as information from the banks and energy/phone providers. There are of course lots of information that the credit report does not entail such as fines, race/religion, salary, how much you have in your savings account, medical history, criminal records and any information on your relatives. Although the credit reports will not take this information into account when providing you with a credit score, the bank manager might still take this information into account while making their decision which is something to bear in mind. There is very little difference between the different credit scoring agencies so my advice is to sign up with Equifax and cancel before the 30 day trial period is up. If you forget to cancel with Equifax, they will only charge you £6.99 but if you forget with Credit Expert they will charge you nearly three times that for pretty much the same service.