How to check your credit rating

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You may want to check your credit rating if you’re thinking of applying for a loan, mortgage, credit card or other financial product – or maybe you’ve already been turned down and want to understand why.

If you have a poor credit rating, some lenders will still provide loans or other products but they may offer you a higher interest rate or a smaller loan amount as a consequence. The Money Advice Service can help you find out more about loans and factors affecting your borrowing power.

There are three main credit checking agencies in the UK: Experian, Equifax and Callcredit – all offer you the ability to check your own credit rating online, but be aware that some charges may apply, or that money may be taken from your account after your free trial period ends.

But why should you even care about your credit rating? Well, it’s not just loans that are affected. If you’re looking to get anything that requires regular payments such as a mobile phone on contract or a catalogue account, you’ll still have your credit rating checked. Some employers, particularly those in the financial services sector, also request your credit rating report prior to offering you a job.

If you’ve received your credit report and something doesn’t look right, you can complain to the referencing agency you used. They will put the relevant information under dispute while they investigate your complaint.

There are some things which you can sort out quickly to make sure your rating is as good as it can be:

  • Make sure you’re on the electoral roll – lenders will run this check to make sure you are who you say you are. Find out more about registering to vote at www.aboutmyvote.co.uk.
  • Correct any change in circumstances – for example if you’ve lost your job or got divorced, let lenders know as soon as possible if it’s likely to impact your ability to repay.
  • Cancel any unused credit cards or accounts you no longer use.
  • Avoid making repeat applications.
  • Make sure you have arrangements in place to repay any current debts (if you are struggling to repay existing debts, charities such as Step Change offer free advice and assistance to help you take control and manage your repayments).

Other things that may impact your rating include factors such as whether you’re already a borrower. According to www.moneysupermarket.com some lenders may register the fact you’ve never borrowed before as a negative thing. This is because there’s no record of your ability and reliability to pay. The main factors that could lead to a poor credit rating are previous County Court Judgments (CCJs) or repeated late or non-payments.