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Checking your credit rating

can you improve your credit rating?
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Checking your credit rating can be essential; the key to all our financial decisions whether it’s getting a new mobile phone contract to applying for a mortgage, all seem to rely on this one major factor. Our credit rating is what lenders use to determine whether they want to provide us some form of credit. Are we at risk of not repaying? Can they make money from us and could we be tempted into other offers? Those with an excellent credit score usually get the best deals and are offered credit easily while those with a bad score often struggle to be accepted. Contrary to popular belief, there is no universal score or blacklist and each lender has its own criteria on deciding who they will accept.

Are you a risk?

Often, having no credit history at all can be just as bad as having missed payments and developing a bad credit score. Another common myth is that those who repay their credit cards in full on time or shift their credit around to get the best deals are ‘perfect candidates’. In truth, lenders base their decision on how much money they can make from you and so a money savvy customer who never pays interest or fee’s isn’t going to be attractive to lenders and may also be rejected. Each lender will decide who their ideal candidates are likely to be and their set their own requirements. Some lenders are happy to take on clients with a bit more ‘risk’ as the chances are they will also make much more money from them with higher interest rates and charges and others will prefer to stick to a more stable customer to offset any risk of losing money should they not pay. In short, if one lender rejects you, another may fall over themselves to offer you their best deals!

checking your credit rating

Viewing your credit file

Your credit file is available for you to view and you should check it regularly to ensure there aren’t any unknown debts, CCJs or searches that have been taken out without your knowledge and therefore ID fraud. Things like old bank accounts or unused credit cards can also have an adverse affect on your rating and in some cases an unused mobile phone contract that was taken out at an old address has been the cause of rejection. If you are planning on making any big applications, checking your credit file is a must to avoid unexpected issues or minimising the risk of rejection. This way you can either tailor your application to a lender that is more inclined to accept you based on your score (a ‘bad credit’ credit card for example) or tidy up your credit history in anticipation of any larger applications.

Make sure its correct!

Occasionally, information on your credit file is wrong and if that is the case check with other agencies that it is correct then get it amended as soon as possible. Write to the lender where the fault lay and ask them to correct it. If they don’t you should write to each agency explaining your reasons for the inaccuracy, called a ‘notice of correction’ and if necessary, you can always complain to the Financial Ombudsman who can enforce changes on your files.

If you do have a bad credit score, there are ways you can rebuild this: Close down any unused bank accounts, credit or store cards which can be seen as a fraud risk. Ensure your information is consistent i.e. the same names, addresses and use your landline telephone number on applications. Space out applications as to not appear desperate and if not already, get on the electoral role!

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About Rebecca Robinson

About Rebecca Robinson

After spending the last 8 years juggling life as a mum of two, wife and working full time as a Project Manager for a global telecommunications company, Rebecca Robinson made the decision to follow her love of writing and took the plunge; turning her passion into a full time career. Since becoming a full time writer, Rebecca has worked with various media and copy-writing companies and with the ability to make any topic relevant and interesting to the reader, now contributes to The Working Parent on articles ranging from credit cards to teenage relationships. Ever the optimist, Rebecca's dreams for the future include a house in the country filled with children, dogs and horses in the field!

Website: Rebecca Robinson

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