If you are looking to borrow money, in the form of a loan, credit card or mortgage, it is advisable to get a free credit report before approaching a lender.
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Your credit report is a record of your financial history; it includes details of any credit against you, it has records of your repayments, including any you have missed, a list of any financial products you may have applied for, even if you didn't actually go ahead with them, and any court judgements outstanding against you will also show up. Lenders can see all this information, and use it to help them decide whether or not to lend you money.
Your credit report also holds details about your current address – information taken from the electoral role. This is useful to lenders because it means they can check you are who you say you are and live where you say you live. It is also useful in the fight against identity fraud, because each time a loan application is made in your name; it appears on your credit report. So if there is an application on the report that is nothing to do with you, you stop a potential identity fraud from happening.