Examining and Improving Your Credit Rating
Copies of your credit report can be obtained from credit reference agencies for a small fee. Before you apply for a car loan, you should ensure that your credit report is up-to-date and accurate. Having the wrong address, incorrect dates between which you lived at certain addresses or out-of-date debts will affect your ability to obtain a car loan. In some cases a lender, whether a credit card company, a loan, mortgage or utilities provider will search your credit report more than once in relation to the same application. If this is the case, you should contact the lender directly to ask for duplicate marks to be removed. Similarly, a credit report may associate you with other people, for example, people you have lived with in the past. If you have no financial association with them, you should contact the credit reference agency and ask for such marks to be removed.
To improve your credit rating further, aim to clear any outstanding debts, whether from credit cards, a personal loan, a mortgage or unpaid utility bills. You should ask your creditors to inform credit reference agencies as soon as possible after the debts are paid so that your credit report reflects the repayment. If there were unavoidable personal circumstances that led to you falling into debt, you may file a 'Notice of Correction'. This is a statement of up to 200 words that you may write to explain the circumstances surrounding the debt, for example, if you were made redundant and were no longer able to make repayments. This statement will be made available to future lenders and can help improve the credit score they give you. If you have any County Court Judgements (CCJs), you should try to settle them as soon as possible. Credit reference agencies will be informed of the settlement automatically within four weeks. You should also ensure that your electoral roll registration is up-to-date; if your current address does not match that on the electoral roll, your credit rating can be adversely affected.
Bankruptcy
If you are bankrupt, or have been in the past, this will be visible on your credit report for at least six years. Bankruptcy has an extremely negative affect on your credit rating, because lenders will be concerned that you will fail to make repayments in the future. Once your bankruptcy has been discharged, or annulled, you should contact credit reference agencies and ask them to update your report: they are usually not automatically informed.
