Keeping track of your credit report is essential to ensure you remain creditworthy at all times. Like we check our bills and bank statements every month, looking at your credit report and ensuring things are on track will help to get the best deals for credit cards, mortgages and loans etc.
We look at some of the main factors to maintain a healthy credit report like:
History of payment
The payment history must reflect accurately as it has a direct effect on the credit score. The payment history shows all the payments made whether they were on time, in part or full. Any defaults or missed payments will also show in the credit history. However, the history of payments may not always be the same as the statement which is because lenders report the payments at different times. Any payments made that do not feature in the history should be checked with the lender as it would lower the credit score.
Hard vs Soft searches
There are two types of searches carried out by companies Hard/ Soft search. Hard searches are done by companies when an individual applies for credit and is generally in-depth and impacts the credit score negatively.
A soft search is mostly done by an individual to know their credit score or by a company to see if the applicant is eligible. A soft search will show up in the report but is not visible to lenders and does not affect the credit score.
It is necessary to check if any hard searches feature on the report (if you have applied for finance). If you have not, you could contact the lender to remove the error or it could be checked for fraud as well.
Soft searches constitute personal and quotation searches with the latter used to check eligibility for products and lower interest rates.
Check the accounts
Examine the report for the accuracy of the accounts. Apart from the mortgages, credit cards, current accounts etc. there also must be certain utility and mobile phone bills etc. The accounts can have a direct impact on the credit score. If any account is inaccurate or does not seem to belong to you get in touch with the lender and have the issue sorted out at the earliest so that it does not negatively impact the credit score.
Financial associates
If you have applied for joint credit with anyone those associations need to be carefully monitored from time to time. All such financial links must be up to date and accurate. Having a financial association with anyone will result in their financial history having a direct impact on your credit report as well. If you have applied for credit, the lender might search your associate’s financial history. If they find anything unsatisfactory in the associate’s track record, the lender might reject the credit application despite your credit history being clean. If anything is inaccurate it should be reported to the lender without delay.