How to Get a Free Credit Check

Avoid Rejection by Lenders by Looking For The Credit Check Score

Sep 12, 2009 Carol Finch

Lenders use credit checks to assess risk when lending money. Consumers looking to borrow can look at their own credit history first to work out their chances of success.

Lenders have to be careful when they lend money to consumers. Making the right decisions means that they get their money and interest charges paid in full. Making the wrong ones could leave them out of pocket. Most lenders will, therefore, run a credit check on a consumer's financial history when they make an application. This helps them assess whether to approve or reject applications and what kinds of interest rates to charge.

How do Lenders Use a Credit Check?

A consumer's credit history can tell a lender a lot of things. It can, for example, give a snapshot of the kinds of financial accounts and products the consumer has had in the past, which ones they currently run and any that they may have applied for and not been given.

Lenders will look at this financial track record and look for negatives as well as positives. A consumer that has a few financial accounts/products in their name that they manage well will be deemed as having a good credit history. Those with problems will lose points on credit scoring for each negative that they have. Common negatives include:

Full defaults on loans or payment agreements.
Missed payments.
Late payments.
Rejected applications for finance by other lenders.
IVA, bankruptcies and CCJs.

Every negative will lower a credit score. After assessing the record the lender will have a base score based on the good and the bad. This score basically tells them:

If they should let the consumer borrow money/open an account.
Whether they qualify for the lowest interest rates on offer as a good risk or whether they may be charged higher rates as a bad one.

Lenders may all approach this scoring procedure in different ways so there is often no telling which way they will go. But, consumers may be wise to take up a free credit check themselves before applying for credit to see what is likely to happen.

How do Consumers Make Their Own Credit Check?

All of the major credit referencing agencies (Experian, Equifax and Callcredit) offer a range of subscription services that allow consumers to constantly monitor their credit ratings. Doing this kind of thing can be a useful thing on an ongoing basis as it can help spot issues like ID fraud. But these companies also offer a range of free services and checks that could help here.

So, a consumer could sign up for a free trial and see basically what a future lender will see. They can, for example:

See if there are any problems that might look bad to a lender.
Fix any mistakes or any incorrect information.
Add any useful information that might be missing.
Take measures to clean up their credit history.

All of this can make a real difference. If everything is fine, then the consumer gets peace of mind. If things are not so good then they will have more information to help them decide whether to apply for a product/account now, whether to wait awhile whilst they clean up their record or whether to look elsewhere (i.e. within the bad credit sector).

Not doing this can lead to further problems. If a consumer forgets that there has been an issue in the past or a mistake has been made which will show up here then they could make things worse. If their application for credit is denied then that rejection will then show on their rating, potentially making it even harder to get approval in the future. So, spending a few minutes taking out a free credit check and then doing what they can to clean up their credit report could save them a lot of stress and even money.

The copyright of the article How to Get a Free Credit Check in Personal Budgeting/Finance is owned by Carol Finch. Permission to republish How to Get a Free Credit Check in print or online must be granted by the author in writing.