Credit Scores – The Complete Guide
Your credit report is a major factor when it comes to your ability to access almost any type of finance, from large purchases such as a house right through to small levels of borrowing like taking out a contract on a mobile phone for example. If your credit profile is poor, you could end up paying higher rates of interest and even find yourself unable to borrow at all.
In this guide, we take an in-depth look into credit reports and detail how to check your own report as well as fix any errors that may be affecting your ability to borrow.
What exactly is a credit report?
A credit report contains information about a person’s credit history and is used by lenders as part of their assessment of an applicant’s ability to borrow responsibly and keep up with their repayments. Details on a credit report include a person’s history of repayments, showing whether they were made on time or not, information on any credit cards or loans (both open and closed accounts) taken out over the previous 6 years as well as other information including your home address and whether you have any joint accounts.
When is it necessary to check your credit report?
Staying on top of your credit report at any given time is a sensible approach to managing your finances. Mistakes on a credit report are fairly common and may hamper your chances of being accepted for credit. It is therefore sensible to check your credit report regularly to make sure it is accurate, even if you do not have any imminent borrowing plans. Leaving it until you do require access to borrowing could result in difficulties if your report does in fact have mistakes on it.
Where can I see my credit report?
There are a number of companies that provide access to check your credit report from free services to paid ones. However, it is important to note that merely having access to view your report is not necessarily enough, particularly if you do find mistakes. In the event of finding a mistake you will most likely want to resolve the issue quickly which is why we have partnered with UKCreditRatings, who can fix errors in your report within as little as 2 days. Other providers can take as long as 2 months to have issues rectified.
If you want to check your credit report now, UKCreditRatings provide a 14 day free trial and you can sign up here.
What are the benefits of having a good credit rating?
The main benefit to working on/maintain a high credit score is that a higher score will usually help you access lower interest rates on your borrowing. This effectively means that it will be cheaper for you to borrow. As well as the possibility of lower interest rates, you may also find that you are able to access higher levels of credit, an example of this would be a credit card with a higher credit limit.
I have a poor credit rating, what can I do?
If you think you have a poor rating, for example if you have been unexpectedly refused credit recently, the first thing to do is to check your report and see what may be adversely affecting your rating.
It may be that you have a mistake on your report such as a missed payment being incorrectly reported, in which case you can work with UKCreditRatings to have this rectified.
However, if it isn’t a mistake there are still a number of things you can do to take charge of your finances and UKCreditRatings will highlight possible ways for customers to improve their credit score.
With the average household debt in the UK being £59,708 in 2019 (inclusive of mortgages), managing your credit score and ultimately improving it is one way to help keep your borrowing costs lower whilst at the same time ensuring you have access to credit when you need it.
Check your credit score with a free 14 day trial from our partners at UKCreditRatings today and see where you can improve. Get started here.