What your credit report means to you - and how to improve it

Your credit report lists your credit accounts, your repayment record and much more - and it can make all the difference between getting the credit card or loan you want and a string of puzzling rejections.

Read on to find out what it contains, how it's used and what you can do to improve it - and your chances of getting the credit you need.

1. If you're over 18 and have ever taken out a credit card or loan, apart from a student loan, then you have a credit report, which is held securely by a credit reference agency - Experian is the UK's largest.

2. Lenders usually check your report when they decide whether to make you an offer and what terms, such as interest rates, to set.

It helps them to make informed and responsible decisions.

3. As well as listing your credit accounts and showing whether you make repayments on time and in full, your credit report contains a range of information that helps lenders to assess whether you are a reliable borrower and can afford to take out more credit.

This data includes details of any court judgments against you for non-payment of debts, plus bankruptcies or individual voluntary arrangements you've taken out.

4. The electoral roll shows if you have registered as a voter at your current address.

Lenders check the roll as a precaution against fraud, to make sure that you live where you say you do.

5. Another section lists the people with whom you share a joint account, such as a credit card.

These people are known as your financial associates.

Their credit report details don't appear in your report but lenders may look them up separately because their circumstances could affect your ability to repay what you owe.

6. All this information comes from two major sources.

Some is from public records, such as court records and the electoral roll.

The rest is contributed by lenders. Some lenders only share negative information, such as missed repayments.

Others also share positive information, such as regular repayments.

7. Only you can view your credit report.

Lenders are allowed access to check your credit history but only when you've given them consent.

You have a statutory right to see your credit report - see your Experian credit report for free with a 30-day trial of CreditExpert, the UK's leading online credit monitoring and identity fraud protection service.

8. Lenders use credit reports to assess whether potential borrowers are reliable, stable and do not already owe more than they can comfortably repay.

To calculate the chances that you'll make your repayments, they take the information in your application form and credit report and allocate each item a value.

They then use a unique formula to calculate a credit score. Generally, the higher your score, the easier you'll find it to borrow.

9. You don't have a single credit score because every lender uses a slightly different formula in their calculations.

Some even use different formulae for different products, so you could get different decisions if you applied to the same lender for a car loan and a store card.

10. Your credit score also changes over time, as your circumstances change.

For example, paying off a loan could improve your score, while missing a couple of repayments could cause it to fall. 12»