Government Aim To Make Credit Reports Free

Thursday, 11. February 2010

The Treasury Select Committee has questioned whether individuals should be charged for copies of their credit report. At the moment it costs £2 or you can obtain a copy for free but it requires you to apply online to one of the credit reference agencies, provide credit card details as though you were going to pay monthly for anytime access, then cancel as soon as you’ve downloaded your current report, otherwise they continue to take the monthly fee from your credit card account. However, the Government and consumer groups recommend that consumers check their credit reports on a regular basis so the Government is considering making the reports free. Unfortunately, too few people check their credit reports before applying for credit only to be declined because of an error. But many people don’t understand that some types and levels of adverse information are not enough to cause you to be turned down for finance but may prevent you from being offered the best terms or interest rates. Also, with the high occurrence of identity fraud these days, which is growing, obtaining regular copies of your report will show if anything untoward is happening. If you pay a regular monthly fee to a credit reference agency they also provide you with an alert if a loan is taken out or a new credit card issued against you which may be the result of fraud. When finance companies and banks first used a credit reference agency consumers would only obtain a credit report when they were declined for finance and the only checks would be for county court judgements and if they had been settled or defaults and whether they had been paid off. These days so much more information is stored there is greater opportunity for errors to be made so it’s becoming more critical to check the information held on a regular basis. In my opinion problem is one of education. It’s all well and good providing credit reports free of charge but consumers need more guidelines, they need to be able to read a credit report but more important they need to know the importance of getting a report in the first place. The number of credit reports requested by individuals is miniscule compared to the population so if the Government is going to make reports free it needs to explain why people should apply for them in the first place. Many surveys have been carried out that show that the vast majority of people don’t know that credit information is held on utilities and mobile phones so unless the message gets across about the importance of the credit information it’s a bit pointless making the reports free. Graham Hill