Your credit report is used by all sorts of organisations - from banks to landlords to employers - to get a sense of who you are and how reliable you are when it comes to managing your finances. They'll use the information in your credit file to confirm your identity, make sure you live where you say you do, and assess how much of a credit risk you might be.

 

Let's look at at an example of how your credit report can come into play with lenders and creditors

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When you apply for a loan or credit, lenders are going to take a close look at the information in your credit file. They use that to figure out whether they should lend you money, how much they're willing to let you borrow, and what interest rate they'll charge you.

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They'll examine your credit history to see how you've handled debt in the past. They'll also consider your current financial obligations and how reliably you've been making payments. All of that helps them assess the likelihood that you'll pay back what you borrow from them. Based on their evaluation, they'll make decisions about the terms they're willing to offer you.

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