Credit Checks

The main reason you have a credit report is so that lenders can look at this information (with your permission) when they need to make a decision on whether or not to lend to you.

Lenders will use your credit report to assess the level of risk they’re taking on when they lend to you. They’ll look at things such as if you’ve paid back your debts in the past, how you’ve paid it back (e.g. on time or late) and how much debt you currently have. Lenders will look at your credit score too, but since this is only giving an indication of what’s in your credit report, they won’t use your credit score alone to make a lending decision.

It won’t always be lenders that want to look at your credit report. Sometimes other types of companies may ask your permission to check your report, such as a potential employer or landlord, if they want to see how well you handle your finances. Debt collection agencies may also check your credit report if they’re trying to find out more information about you.

We’re going to talk about the checks that lenders and other companies carry out on your credit report and which of these might affect your credit score.