Your credit score is the most important aspect of your personal finance. This will decide wether you will get a mortgage or not and influence any future outcome, if you are applying for a loan. It should be simple to grasp and understand; but there is still a lot of noise and the terms are several. You might have heard of credit score, rating, report and also statutory credit report. These all seem to be the same thing, but they are not.
What is a statutory credit report?
This is a one-off credit report, which costs £2 to get access to. You can order it by post or see it online through the three main credit bureaus in the UK: Equifax, CallCredit and Experian. This report contains both private and public information that lenders use to decide whether or not to give you credit. It’s the exact picture that a lender has, when you apply for a loan, and plays a key role in the credit check process. The good thing is as a consumer you have the right to see it.
When you make a credit application, the lender gets a copy of your credit file to check your credit history. The aim is to determine the risk involved in giving you money. Under the Consumer Credit Act 1974 you have the right to request a copy of your credit file for just £2.
What information does it contain?
This £2 report is a snapshot of your credit status at the time the report is created. It contains public and private data about your credit history up to six years.
These are the main characteristics:
- Personal details
- Financial links to other people
- Presence on the electoral register
- Credit accounts
- Any missed payments or defaults
- Search footprints on your file (up to 2 years)
You should check this information on a regular basis, just to be sure there are no errors or if there is something missing. A simple mistake can make the difference when applying for a loan. If you want to make an amendment, you can directly contact one of the bureaus you have used to get the statutory credit report.
What information is not included in your report?
- Current account information (unless you have an overdraft)
- Savings account information
- Your salary
- Student loans
- Criminal record
- Medical history
- Parking or driving fines
- Council tax arrears
- Information about gender or ethnicity
Why does it cost £2?
Credit bureaus are allowed to charge £2 under the Data Protection Act 1998 for each request. This fee covers the admin costs for processing the request and in exchange, lets you check the health of your credit file. Everyone is entitled to a £2 statutory credit report which the credit agencies are obliged to provide within 7 working days of your application.
There are different ways to improve your credit score, which we have already covered in our guide to improve it. If you also want to know more about your credit score, you can read our previous article about 5 common facts.