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Big Brother really is watching – your credit file

You are being watched more than you know

The dreaded credit file

Did you love watching Big Brother? Being able to watch and pass judgement on a group of strangers? Ever wished you could experience that for a while? Well, guess what? You’re already part of a Big Brother event, where your financial moves are monitored. Yep, it’s called the credit file.

Any time you apply for some sort of loan – including a mortgage – the bank or lender will check your credit history to see if you’re a good bet. There are two main agencies they turn to Experian and Equifax .

Between them the two agencies hold details on some 44 million people in the UK – and we mean details. Each file includes information about your credit cards, your mortgage and your bank accounts as well as facts and figures on any unpaid bills, failure to pay hire-purchase debts and County Court Judgments (CCJs).

All sorts of things can affect your ability to get a loan or set up a credit agreement (such as a mobile phone service):

If you have applied for several new loans or credit cards recently and been turned down. Financial companies are like sheep and if they find that you’ve been turned down by a few other lenders, they’re likely to turn you down too.
If you made several applications for credit and loans at the same time because it makes you look like you’re in a desperate financial situation.
If you have County Court Judgments (CCJs) against you or you have regularly been late with mortgage or loan payments.
If you don’t pay your phone bills for a few months this is considered a big black mark.
Your age affects your points score. Too young can be as bad as being too old.
If you’re single it can be a problem – being married gives the impression that you’re stable.
Having the same address over a long period of time will help.
If you are not on the electoral roll you can be rejected.

Still, though, all lenders are different and you would be surprised who will lend to you and who won’t. Some lenders like students with lots of debt, for example. Others won’t touch them and only go for people in established jobs and, ideally, their own homes. Amazingly, if you’ve never borrowed in your life, never owed money and don’t own any credit cards, many lenders will view you with immense suspicion. Sometimes it seems that you just can’t win!

Improving your credit record

Make sure you are on the electoral roll

Make your payments on time. If you cannot do this, contact the lender as soon as possible to discuss what options are available to you.

If you have paid a court judgment, make sure it is shown as being settled on your credit record. If it is not, contact the court.

If a bankruptcy order has ended or been withdrawn and this is not shown on your credit report, send a copy of your certificate of discharge or annulment to all credit reference agencies and ask for your report to be updated.

If you have paid off a credit account but your report doesn't show this, contact the organisation concerned and ask them to make the necessary changes, or contact us and we will contact the relevant organisation for you.

Avoid credit repair companies. If information on your credit report can be removed or altered, Experian will do it for free. The Office of Fair Trading has issued a warning that the advice and information given by credit repair companies may be wrong and unhelpful and can even make your situation worse, not better.

Always check your credit report. It always makes sense to get a copy of your credit report before you apply for credit or if you have been refused credit as a result of information held by a credit reference agency.

It's a good idea to have a look at your credit report from time to time just to see what they are saying about you. Get in touch with Experian, Equifax and Check my file as they don't hold exactly the same information so it's worth getting copies of both. It will cost you just £2 for each file (although they will try to sell you a more expensive one with bells and whistles, so be aware).

Most people only need the basic report. But there are some that would benefit from paying a monthly fee to have access whenever they want it. These include: