Understanding different forms of credit

The better you understand your credit report, the better equipped you'll be to spot potential problems. So let’s take a closer look at the different forms of credit you might find on your credit report. And remember, if you find any mistakes, you should always contact the relevant CRA right away.

Unsecured credit

These will probably form the lion's share of your credit data, and generally fall into two categories:

  • Fixed sum loan agreements - When you borrow a fixed amount and the repayments are worked out ahead of time

  • Revolving credit - When you have a credit limit and the repayments and balance could change at any time. Usually a credit card

Secured credit

This means a loan secured against something. Usually a mortgage (secured against your home).

Telecoms and utilities

Telecoms refers to your mobile phone contract. Because your monthly payments cover the cost of handset over the length of your contract, this is a form of credit.

Utilities often get their own section in your credit report. It counts as credit because you're paying in arrears (the service has already been provided by the time you pay for it).

Short-term lending

Any loan that gets paid back in (normally) six months or less. These often get their own section too.

All this data is available to any potential lender when they perform a credit check on you.

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