How to avoid credit report mistakes

A credit report is a big potential problem for anyone that is looking to borrow money

whether that's in the form of a loan, a mortgage or, for short term lending, in the form of a credit card.

Mistakes or inaccuracies on a credit report can spell higher interest rates or even rejection from lenders. This article will look into what the consequences could be and then how they can be solved.

So, to start with the consequences, when you compare credit cards you're looking at a headline rate of interest which is advertised as a variable APR.

APR stands for annual percentage rate but the variable part indicate that the rate won't be the same for every applicant.

The headline rate is an approximation which is meant to be the interest rate offered to two-thirds of consumers who apply. However, due to fact that lenders can't tell in advance who's going to apply for the card this may not always be the case.

In all, though, those with a better credit report will get the headline rate rather than another higher - and consequently more expensive - rate.

Variable rates can also be a part of the process when you compare personal loans.

In both cases, though, there are factors which can affect applicants outside of their credit reports.

For example, when you compare current accounts you may notice that some banks offer preferential rates to their existing customers whom they can keep tabs on.

Now, to turn to the actual nitty gritty of the credit report, it's worth getting in touch with one of the big agencies such as Experian, Equifax and Call Credit and either signing up for a free trial of the service or buying a two pound statutory report online or applying for one by post.

The two pound statutory report must now be provided as a legal requirement by the credit reference companies - two pounds is thought to just cover their administrative costs.

From this you can see that you'll be in better shape for new credit if you pay off old debts, get rid of open lines of credit and stay out of your current account overdraft as much as you can as well.

Missed repayments will stay on your credit report for the next 36 months so you can query any older than that.

County Court Judgements (CCJs) stay on a report for six years so, again, ask for these to be erased if they're still there.

How to avoid credit report mistakes

By: Julia Cook

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