Five ways to improve your credit rating
1. Check all your personal information is up-to-date
If you've changed address and this hasn't been updated, you'll need to notify your local authority of your new address. Doing so will ensure you are put on the relevant electoral roll - and boost your credit score in the process.
2. Your credit report will reveal any financial links you have with other people, such as joint accounts or partners' debts.
Contact the credit agency that provided you with the report if you think any of the information is incorrect or you suspect any suspicious activity.
3. If there's a bad mark on your credit report that is factually true but you believe can be explained by extenuating circumstances, you can attach a note to your file explaining this.
Creditors don't have to take this into account, but they can, and the very fact that you have left a note to explain a particular blot shows you want a better credit rating.
4. Every time you apply for credit, you mark your credit file with what is known as a footprint.
If a lender sees you've made a lot of credit applications in a short space of time, it may reduce your chances of getting credit. Exercise caution when applying for credit and read the terms and conditions before signing up.
5. Conversely, you can check your credit file as many times as you like without damaging your credit rating.
Keeping an eye on it is one way of making sure you're not a victim of ID fraud. You can get a statutory £2 one-off credit report from any of the main three agencies - CallCredit, Experian and Equifax.
Your credit score is a three-digit number (ranging from a low of 300 to a high of 850) calculated from the information in your credit report. Your credit score enables lenders to determine how much of a credit risk you are. Basically, a low credit score indicates you present a higher risk of defaulting on your debt obligations than someone with a high score. If you have a low credit score, any products you successfully apply for will carry a higher rate of interest commensurate with this risk.
A report containing detailed information on a person’s credit history, a record of an individual’s (or company’s) past borrowing and repaying, including information about late payments and bankruptcy. It also includes all applications a person has made for financial products and whether they were rejected or accepted. Your credit report can be obtained by prospective lenders to determine your creditworthiness.