What is a credit report?

You may not know it, but there's a good chance that you have a strong credit report.

This is a personal history of your credit, including mortgages, credit cards and loans to catalogue accounts and even mobile phone contracts.

Your credit report provides a snapshot of credit accounts, your repayment record and how well you are coping. Lenders use it when they decide what kind of deal to offer you, or whether to turn you down.

The more you know about what your report contains, how it's used and what you can do to improve it, the better your chances of getting the credit you need. This summary will help you sort your credit report.

1. If you're over 18 and have taken out a credit card, loan or some other form of credit, then you are likely to have a credit report held by a credit reference agency.

2. 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 assess whether you are a reliable borrower and can afford to take out more credit. Items such as missed or late payments stay on your report for at least three years, while court judgments for non-payment of debts, bankruptcies and individual voluntary arrangements (IVAs) stick around for at least twice that long.

3. Your report shows all your addresses over the past six years and whether you are registered to vote at your current home. Lenders use this information as a precaution against fraud to make sure that you live where you say you do.

4. Another section lists the people with whom you share a joint account, such as a credit card or mortgage. They are known as your financial associates and, although their credit history doesn't appear in your report, lenders are able to look at their credit history because their circumstances could affect your ability to repay what you owe.

5. Information in your report comes from two major sources: public records, such as court judgments and the electoral roll; and data supplied by lenders.

6. Lenders are not the only people who can check your credit history. With your permission, prospective landlords and employers can see parts of your credit report, so it can also affect your job prospects and chances of renting a home.

7. A credit report is not the same as a credit score. Lenders calculate a credit score by allocating a value to information in your application form and credit report and then applying their own unique formula. Your score is therefore likely to change with your circumstances and each application you make. Generally, the higher it is, the easier you'll find it to borrow.

8. If you are thinking of opening a new credit account, it makes sense to get to know your credit report first and make sure that it is is accurate and current. If there are any errors, contact the organisation responsible with proof and arrange to get them put right.

9. Monitoring your credit report can offer protection from one of the fastest-growing crimes of the 21st century - identity fraud. This includes criminals stealing your personal information and using it to take over existing accounts or set up new ones in your name. Keeping an eye on your report enables you to spot suspicious entries and deal with problems before they escalate.

10. When you make an application for credit, lenders search your report, leaving a record known as a footprint. If other lenders see a lot of these, they may think you're desperate for money or even suspect a fraud, so you should always make sure you only ask for a quotation search when you are shopping around for the best deal.

Related links
Free 30-day trial of your Experian credit report
Check out MSN's guide to credit reports