As already established, there are three major as imperative reasons why you would opt for the services of a credit reference agency to enable you to monitor your credit:-
- It provides you with a regular transparent record of what credit facilities you have, have had and have applied to have.
- The above information empowers you to identify and address actual and potential identity fraud and theft, (expanded upon in further detail on another page).
- It enables you to take measures to improve your credit rating that will prove advantageous to you not only when applying for future credit, but when looking to move in to new owned or rented accommodation.
Taking the combined elements of the ‘Crucial Three’ in to account, it can become a self explanatory common sense decision to enquire with reputable credit reference agencies about the services they offer, what they charge and any additional benefits that are included in their packages.
What Does Credit Monitoring Entail?
Credit Monitoring Services Guide
Firstly and whether you like it or not, you cannot stop credit reference agencies holding financial information about you; there is no opt out facility and they are legally entitled to do so under the Information Commissioners Office’s 1998 Data Protection Act and the Office of Fair Trading’s 1974 and 2006 Consumer Credit Acts.
They primarily exist to provide lenders with the relevant information they need to appropriately deal with credit applications made to them. Their services are purely informational and they have no direct bearing or influence on lenders’ final decisions.
However, on the flip side of the coin, the information they hold on you and share with your prospective lenders is not kept behind closed doors. Most of the well known credit reference agencies offer a free months trial, which allows you to find your way around your credit report and familiarise yourself with how you can put the information it discloses to best use.
Should you then decide that it is the way forward for you, their monthly charges start from very affordable single figure sums.
Your key concerns when monitoring your credit revolve around the Big Three issues of your current credit status, identity fraud protection and home moving. Interlinked with these major factors, your new found credit monitoring will trigger several calls to action that will contribute positively to all three:-
Bankruptcies
If you have been declared bankrupt and your order has come to its natural conclusion or been withdrawn, you can dispatch certification of your annulment or discharge to the major credit reference agencies to have it removed from your reports, thus countering any further adverse effects it previously had.
CCJs
If you have had a CCJ, you are safe in the knowledge that you will see it visibly removed from your credit report after six years, or, if it is not omitted after that point, you can contact the County Court that issued it to get it removed.
Dormant Accounts
Whether you have repaid credit accounts in full or still have open bank accounts that you no longer use, seeing these continuing to appear on your credit report will prompt you to close them, after which they are no longer included.
Electoral Roll
You can check that you are not only on the Electoral Roll, but on the correct one and are also prompted to make timely amendments if you change address.
Repaid Credit
You can spot any arrangements that you have since paid off in full, yet still appear as live on your report, and contact the lender to request that they update your information.
Timely Payments
If you struggle, or have struggled in the past, with making timely payments, the regular black and white evidence of how your credit rating is adversely affected might prompt you to either start paying up on time or contact your lenders if you have difficulty in doing so.
Credit Monitoring Sounds Like A Great Solution – Are There Any Hidden Problems?
There are no serious concealed issues as such, although perhaps a couple of things that you should be aware of that might prevent you from obtaining all of the answers you hope to find:-
Lack of Credit Score Uniformity
As you are already aware, your credit rating or score is what your potential lenders arrive at, based on information they extract from your application and your credit report. As different lenders have different criteria that influence their ultimate decisions to lend or not to lend, it can be resultantly difficult for you to improve your rating and prevent future rejections.
Furthermore, whilst some credit reference agencies are happy to share your credit rating based on your credit report with you, this is sometimes not necessarily helpful. Why not? Because your credit report only contains information about your credit history appertaining to your overall financial robustness.
What it does not take in to account is the confidential information about your employment and income that you include on your credit application for scrutiny by your potential lender only, not credit reference agencies.
Ongoing Presence Of Unexplained Rejections
As you also know, any declined credit applications are shown on your credit report and may influence the decisions of future lenders. Whilst reasons for rejected applications do not feature on your credit report, it can be frustrating for you not to know the basis on which you were refused by a particular lender.
It might be the case that you simply failed to make their grade due to information on your application, in your credit report, or they already hold on you due to past dealings. Or it could be that you do not fit in to their target customer mould for a variety of different reasons.
Ultimately, the pros outweigh the cons when remembering the reasons why you are interested in monitoring your credit. Your credit report does far more than potentially protect lenders. It is an affordable and simple measure that can also help you to protect yourself.
