What will my credit report tell me?

I was recently refused a contract for a mobile phone here in the UK on account apparently of my poor credit. The phone company suggested getting in touch with Equifax, a credit record company to find out about my credit record.

I’ve heard about them with regards companies checking up on potential customers, but I didn’t realise they’d sell me a copy of my credit report. One thing, what exactly will having this show me? Is it worth sending them off a tenner to see it?

It’s worth it, but I’m surprised they make you pay. However, the laws in your Ireland may be different then here.

It will show (typically) what accounts you have held in the past, how many 30 day, 60 day, 90 day and 120 day late payments you’ve had on each account, how many accounts you’ve defaulted on, what kind of hard or soft credit inquiries were made and any bankruptcies you’ve had.

I check mine annually, and twice now have found discrepancies that were detrimental to my credit. I had them investigated and fixed and my credit score went up.

Its not much to pay I guess, I was just wondering if it was something that might prove useful to me.

I got a loan not too long ago from the bank to round up a few outstanding debts and I’ve had my last contract mobile phone for 18mths with no late payments, so I was curious to know why another phone company had refused me.

Well, it could be bad payments on your account that aren’t yours. What about utilities? I know in the US those are generally reported as well.

These outstanding debits, were they all late payments as well? That may be on there too.

To be honest, the main reason I print out mine is to make sure no one’s using my credit, as in, making sure my identity hasn’t been stolen.

It’s not just your credit report or bad credit per se. Mere applications for credit can count against you, as can high credit limits.

I thought high limits only count against you if you are maxed out or carrying a high balance. It is my understanding that having a high limit that is unused is very beneficial. Am I mistaken?

No, an unused high limit is not beneficial. It signals that you have the capacity to take on a heavy debt. But even a low limit maxed out is bad. It’s all a matter of balance. The creditor is looking for a financial lifestyle, one that indicates fiscal responsibility and moderation. The best thing to do for obtaining credit is to keep your limits as small as possible, your inquiries as few as necessary, your payments up to date, and reasonable debts that have been retired in a timely fashion.

As is says here:

Having a high credit limit can, in some circumstances, adversely affect your overall credit rating. Since you already have the potential to borrow a larger sum of money it would put a new potential lender in more risk if you decided to do so. In addition, a lower credit limit can also adversely affect your overall credit rating, especially if you use a greater percentage of your available credit. This is because it makes it appear that your are using up almost all the credit you have making you appear to have financial difficulties or problems managing your money.

No, and this is where the maddening trickyness of credit reports and scores comes into play.

If you go for a loan of some sort and they run your credit report, and the report shows that you have a ton of available credit (say $30,000) the loan institution might refuse you because you have the ability to be $30k in debt. The loan institution might think that you would pay off the $30k credit loan first and default on this new loan you’re applying for.

It’s not a hard-and-fast rule, as it’s up to the people loaning you money to decide what they want to do, but no - having a bunch of un-used credit is not always a good thing.

Interesting, because I used the loan to pay off some cards but I’ve not yet cancelled them. I’ll round them up and get rid of them today.

Thanks **Lib **and Zipper.

Perfect. That is exactly the right thing to do.

(You’re welcome, Queen Bruin.)

Queen Bruin - do make sure you hang on to your oldest card, even if you don’t use it anymore. Keep it but don’t cancel it. Having “old” established credit is also a good thing.

Will do - I still use it anyhow (it’s my gas card - since I’m a commuter this is one of my larger expenses) and pay it off in full every month. I am sure that the 4 years of this behavior looks pretty good on my report.

Yeah, I do agree with that. We have one credit card, which we use sparingly, never for “loans”, and pay off immediately.

Out of curiosity, what’s considered a high limit? My credit card company raised mine twice, entirely unsolicited, last year.

For the finacially highly disciplined, a cashback credit card is great. I pay for everything on my credit card and pay it off in full each month. I get extra interest on my current account and 0.5% cashback (I think, it’s time to move). This year I worked out I profited to the tune of about 100 pounds for zero effort. Of course this is not for those who may possibly not manage to repay in full every single month.

On topic, I got copies of my credit reports a while back after being rejected by Bristol and West for a mortgage. Long rows of zeros (denoting nothing out of order) were punctuated by one row of 1/2/3s. It appears an account I opened and closed with Alliance and Leicester was not properly closed. I became overdrawn, charges were levied on the unauthorised overdraft etc etc For a period of one year this continued without them sending me a single letter. Fortunately A+L eventually fixed everything (including the credit reports back to 00000 etc)and my mortgage was approved.
Curiously, whilst in limbo, my advisor suggested we could resort (her words) to Northern Rock who’d be likely to agree the mortgage with the low credit score…

Not for stiff like this. Those things sometimes can reduce your FICO score, which is critical for a Mortgage loan. (and when they do, they are a minor part of it. Late/on time payments are the biggest part). I have never heard of a FICO score being used for a phone credit. It costs extra to request a FICO score.

Being refused for a mobile phone means (almost certainly)that the OP’s credit report shows “DeRogs”, such as very late payments, Collection accounts, etc. Not stuff like high limits, Inquiries, etc.

There is a very good chance that (if one hasn’t been monitoring one’s credit) that it has at least one error that will hurt your credit. In my case, I have had: A 15 year old collection account (nothing older that 7 years for this sort of thing), an account belonging to my Father, and another person’s account (he had a similar name).

Pushkin: get a copy. Dispute anything in error, or anything bad more than five years old. IANAL, YMMV.

Yeah, you have to watch them about that. They usually do that to deadbeats. (Note that they define “deadbeat” as a person who pays before the interest charges kick in.) Unfortunately, it’s impossible to answer your question because the FICO formula is a more closely guarded secret than the formula for Coca-Cola. There is a point of diminishing returns, though, as you can tell from FICO simulators. A $5,000 credit limit is better than a $1,000 credit limit generally speaking so long as you’re not spending more than 30% of it and are paying on time. But a $20,000 limit is not necessarily better than a $5,000 limit even if the balance is zero, and especially if your income is not substantial. (It’s an examination of income to debt ratio in the end.) We keep our credit limit on our card at around 7% of our income. We are deadbeats, and we have a very respectable FICO score.

That’s true, but as early as post #4, more general remarks about credit were being made and the OP’s concern had already been addressed.

ETA:

I’ve been FICO assessed on car purchases as well as mortgages.

OK, I’ll buy a FICO on stuff over $10K, but not a mobile phone.