A negative credit rating can have a big impact on your life and can for example prevent you from getting a loan or credit card. Here are our top tips on how to improve your credit rating:
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Don’t apply for credit too often
Credit Reference Agencies (CRAs) such as Experian and Equifax hold information about consumers such as credit applications and court judgments.
Every time you apply for credit a record will be logged on your file. Making a lot of applications can negatively impact your credit rating, as it may suggest that you are trying to borrow too much or even imply fraud, so try not to request credit too often.
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Check your records
Lenders do not have to explain why they are refusing you credit, but do need to say if their decision was based on information from a Credit Reference Agency, and give you the name and address of the agency.
Anyone can check the records that Credit Reference Agencies hold about you under Data Protection and Consumer Credit regulations.
The charge for a statutory credit reference report is £2 and will show who has searched for information about you.
Checking your records can help spot any errors which may affect your credit rating. While people often only check their records after being refused credit, checking the accuracy of the information stored about you can prevent problems arising if you apply for credit in the future.
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Correct inaccurate information
If you find that your file includes information about you which is incorrect, you can complain to the Credit Reference Agency. They will contact their information provider. Agencies have 28 days to answer complaints.
While this is being investigated, your file should be marked as ‘disputed’ so that prospective lenders are aware the information may not be reliable.
Lenders can also consider the credit ratings of people with the same surname who live at your address, so if your children have debts for example this could affect your credit rating even if this has nothing to do with you.
For more information about credit ratings, contact us or call 0800 024 1976.