Deal of the week: Get your credit score for free
Thanks to a new free service from Experian, everyone in the UK can now check their credit scores with the three main credit agencies without paying a penny.
What’s the deal?
Experian is the last of the major credit providers to provide free credit information, launching Credit Matcher earlier in September. Anyone can sign up and see how they’ll be viewed by lenders, without committing to paying a £15 monthly fee, which is the fee for ongoing access to your full credit report.
Why should I care?
If you apply for credit in the UK, the chances are your chances of being accepted will largely depend on how you’re viewed by the main credit agencies, Experian, Equifax and CallCredit.
Free access to your credit score means you can get a rough idea of whether you’re a desirable customer. If your score seems lower than you’d expect, or it falls suddenly without explanation, that can be an early warning sign of identity fraud.
What’s the catch?
These services only let you see your credit score, which isn’t as detailed or as useful as your full credit report.
Scores doesn’t show all the granular details held by credit rating agencies, like a history of when you’ve applied for credit, or the signs of whether or not you’ve been going over your credit card limits.
This full information can be accessed for a one-off fee, or through subscription services that cost £15 a month. Given different credit companies use different reports, that means it could cost £45 a month to get a complete picture of how you’ll be seen by lenders.
Experian will cover the costs of this service through credit card advertising.
What are my other options?
ClearScore was the first company to offer free (on-going) access to credit scores, using a similar model to Credit Match, relying on credit card adverts. They’ll provide your credit score, as estimated by Equifax.
Noddle launched shortly after, and gives its users free access to credit score information from ClearScore.
Where can I find out more?
- For Experian CallMatcher: Experian.co.uk/creditmatcher
- For Equifax scores, via Clearscore: ClearScore.com
- For CallCredit scores, via Noddle: Noddle.co.uk
Your credit score is a three-digit number (ranging from a low of 300 to a high of 850) calculated from the information in your credit report. Your credit score enables lenders to determine how much of a credit risk you are. Basically, a low credit score indicates you present a higher risk of defaulting on your debt obligations than someone with a high score. If you have a low credit score, any products you successfully apply for will carry a higher rate of interest commensurate with this risk.
A report containing detailed information on a person’s credit history, a record of an individual’s (or company’s) past borrowing and repaying, including information about late payments and bankruptcy. It also includes all applications a person has made for financial products and whether they were rejected or accepted. Your credit report can be obtained by prospective lenders to determine your creditworthiness.
Used by the holder to buy goods and services, credit cards also have a monthly or annual spending limit, which may be raised or lowered depending on the creditworthiness of the cardholder. But unlike charge cards, borrowers aren’t forced to pay the balance off in full every month and, as long as they make a stated minimum payment, can carry a balance from one month to the next, generating compound interest. As the issuing company is effectively giving you a short-term loan, most credit cards have variable and relatively high interest rates. Allowing the interest to compound for too long may result in dire financial straits.