Examining and Improving Your Credit Rating

Copies of the information that credit reference agencies hold on you can be obtained for a fee. Before you apply for a credit card you should ensure that your credit report is up-to-date and accurate. A report with the wrong address, incorrect dates between which you lived at certain addresses or out-of-date debts will affect your ability to obtain a credit card. In some cases a lender, whether a credit card company, a loan or mortgage provider, may have searched your credit report more than once in relation to the same application. In this case, you should contact the credit reference agency and ask them to remove duplicate marks. Similarly, a report may associate your finances with those of 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 this affiliation to be removed. If a bankruptcy is recorded on your report but has subsequently been annulled, you should ask for your report to reflect this.

Improving Your Credit Rating

There are many ways to improve your credit rating. Firstly, you should aim to clear any outstanding debts, whether with credit cards, personal loans or a mortgage. You should ask your creditors to inform credit reference agencies as soon as possible when debts have been cleared, 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 two hundred words which you write to explain the circumstances surrounding your debt, for example, that you were made redundant and could not afford to meet repayments. This statement will be available to future credit card providers and may help to improve your credit score. If you have any County Court Judgements (CCJs) against your name 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.

Although a risky strategy, you may wish to take out store cards for which customers tend to be approved easily. If you make your repayments in full each month, this will improve your credit rating because it shows that you reliably repay your debts. Nevertheless, do not apply for many cards just to improve your rating: a large number of searches will be recorded on your report and lower your rating as a result. It is more impressive for lenders to see that you use one card responsibly than that you try to balance several cards with varying success.