Why is my credit history important?
Whenever you apply for credit – be that a loan, credit card, mortgage or even things like a mobile phone contract or sofa finance package – the lender will check the information on your credit file.
How will my credit history affect my ability to get a new loan?
The information held on your credit file shows how well, or badly, you have managed credit in the past and what outstanding credit you have. If you have missed or been late with payments it could result in your application being declined. The leading credit cards and loans will be available inly to those with excellent credit histories. Therefore, if yours is less than perfect, you're unlikely to qualify. This doesn't mean you won't be able to get any form of new credit, but expect to pay a higher rate of interest.
How do I find out what's on my credit file?
There are three main credit reference agencies used by banks and building ocieties for credit checking urposes: Experian, Equifax and Call Credit. It's worth getting hold of a copy of your credit file before applying for a new loan, credit card or mortgage to make sure the information on there is correct. You can get a copy of your credit report from only £2.
An increasing number of people are opting to monitor their credit file more regularly. The credit reference agencies offer this type of service from £7 a month – this give you unlimited access to your credit file as well as additional features such as text alerts.
What if the information is incorrect?
If anything on your credit file is inaccurate you can contact the credit reference agency to make a "notice of correction".
Can I improve my credit rating?
There are several things you can do to improve your chances of being accepted for credit. Being on the electoral roll is a must. If you have existing credit cards, be aware of how you use them. It's worth setting up a direct debit to ensure you always pay on time.