Only one in 20 of us have ever bothered to check our credit report – but you could face paying more to borrow money and run the risk of ID fraud if you don’t. Here’s what you should be doing

According to credit monitoring service CreditExpert, only one in 20 UK credit card holders get around to checking out their credit records.  Meanwhile, over 20% of us admit we have no idea whether we have a good credit score or not.

But with identity theft now estimated to cost the UK economy £1.7 billion and affecting 100,000 people every year, not checking your credit records can mean more than just getting a high interest rate, or being turned down for credit.

“We would encourage everyone to check their credit report at least once a year,” said Sandra Quinn of banking watchdog APACS (the Association for Payment Clearing Services).

“Not only is it the best way to ensure they don’t have trouble accessing credit when they need it, it can also provide peace of mind that they haven’t been a victim of identity theft and that no one has successfully applied for credit in their name.”

How the system works
Lenders use the information on credit reports to decide whether or not to lend to us and how much we can afford to borrow. 

Research by The Independent shows that for four out of five loans these days, the interest rate you pay is dependent on your credit report, thereby reflecting the risk the bank thinks you represent to them.  Two years ago 56% of lenders used personalised lending rates, but The Independent says that figure is now more like 81%.

One useful tool is moneysupermarket.com’s Smart Search, which shows you which credit products you’re likely to be eligible for, without leaving a footprint on your credit record that could affect later credit applications. 

Find the right loan for your needs with Smart Search >>

APACS has also put out an online guide all about checking your credit report, available at www.choosingandusing.com

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