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Have you checked your credit rating?

Checking your credit rating could be vital in helping you borrow money, but three in five UK adults never check theirs. Not looking to see if your score is good or bad could prove costly, with errors or forgotten debts just some of the factors that could lead to a rejection.

Despite such a low number knowing what their credit rating reveals, the new research from loan company Ocean Finance also shows nearly one in five plan to apply for a mortgage, credit card or loan this year.

Lenders use a credit rating to get an idea of whether to lend money, how much to lend and how much interest to charge. They’ll also use it to check you really are who you say you are.

How many people are unsure what a credit rating is?

A huge 40 million UK adults are confused how a credit rating affects you. (Source Ocean Finance, August 2015)

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How to check your credit rating

Checking your rating is actually quite easy, and helps put you in a stronger position to correct mistakes or build a better score. There is a cost, something Ocean Finance found puts off a third of people, however it can be very low – or even free – so don’t let that get in the way.

There are three main companies that compile information on you and your credit history. Experian and Equifax have monthly subscriptions but you can get a free 30 day trial, and can also request a report for just £2 after this. The third company, Noddle, offers free access.

What impacts your credit rating?

Here are six of the key factors that can impact your credit rating. These are the things you want to avoid, especially if you are planning a big application such as a mortgage.

If you think any of these will already show up, there are steps you can take to rebuild your score.

Existing debts

If you look like you are over stretched with your finances due to loans, credit cards or other debts, lenders might be nervous about giving you more money.

Missing payments

From mortgages to electricity bills, many missed payments will stay on file for six years.

Multiple applications in a short space of time

It’s better to stagger applications for credit so you don’t appear desperate to borrow money.

A lack of stability

This could be constantly changing addresses, no landline phone number, not being on the electoral register and even no evidence of a financial relationship with a bank.

Mistakes and fraud

You could have old addresses listed, missing accounts, or possibly even evidence of fraudulent applications in your name.

Joint accounts

If you’ve ever had a bill, bank account or more shared with someone else, you could be tied into their credit history. This means their debts can affect your score.


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