Check out your credit rating for free this weekend

From this weekend consumers will finally be able to go online and obtain, for free, the information held on them by credit reference agencies. Until now, they have had to pay £2 and write to the big agencies to access a paper printout of their credit report, or pay around £10 for an online, downloadable copy.

But this weekend a new website, annualcreditreport.co.uk will go live, allowing consumers to check for free if they are among the one in three people who have an error on their credit report. The company is concerned that a sudden rush of users could overload the site - so it is rolling it out nationally over the next few weeks and months.

From this weekend, residents of Cornwall and Devon have access, followed by Wales and the rest of the West in July and Londoners in August.

Users will need to input their name, address, date of birth, previous addresses and email. But because of fears that the information could be obtained wrongfully, or used for identity theft, the first report can only be accessed after the user has been sent a special code to their home - an address confirmed by the electoral roll.

The credit report will display the information that lenders see when you ask for a new loan or credit card.

That includes a six-year payment history on every loan - your mortgage, credit cards and personal loans - and whether you were late with any payment. It also records searches made by companies, electoral roll information, county court judgments and all forms of personal insolvency and fraud warnings.

Barry Stamp, joint managing director of annualcreditreport.co.uk predicts that free online credit reports will provoke an avalanche of complaints from consumers who discover that their record is incorrect.

He says the website will give extensive guidance on what to do if there are errors. But, controversially, he argues against requesting a "notice of correction". Mr Stamp was one-time boss of a big credit agency before setting up the website, and says that it effectively prevents you from obtaining credit in future.

"It almost destroys your credit file. It means that the lender has to follow a manual procedure to decide whether to offer credit. The vast majority won't be bothered to do so, so they just decline you, instead."

He recommends that you contact the lending institution directly if you find an error on your report. One of the problems with credit databases is that every month the lenders re-upload their data to the agencies, so an erroneous entry is constantly re-registered. "It's best to go back to the source and sort it out there or it will keep happening," says Mr Stamp.

If you don't have a home computer, the big providers are legally obliged to send you a copy in the post.

Experian will let you order over the phone at 0870 241 6212; Equifax is on 0870 010 0583; Call Credit on 0870 0601414. Or write to Equifax: PO Box 1140, Bradford BD1 5US; Experian: PO Box 800, Nottingham NG80; Callcredit: 1 Park Lane, Leeds LS3 1EP

For people who want to obtain a copy of their credit report more frequently, Checkmyfile.com offers a credit monitoring service at £39.99 a year with one agency - £69.99 with all three. It includes a full report plus advice and info. Experian also offers credit monitoring with email or text updates for £49.99.