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Thursday 2 April 2015
Thursday 2 April 2015
Thursday 2 April 2015
Thursday 2 April 2015
Whether or not you realise it, Experian, Equifax, and Callcredit have a huge impact on everyday life in the UK. These are the “big three” credit-rating companies. Their services are used for far more than simply assessing loan applications.
Businesses rely on credit-reference agencies for a variety of reasons:
Identity verification for age-restricted products, such as alcohol.
Assessing suitability for mobile phone contracts involving expensive devices.
Employers may also check credit files for roles involving financial responsibility.
This means that even if you have no plans to apply for credit – not even a mortgage – it’s still wise to keep your credit record in good shape.
Credit Records Are About More Than Just Money
Improving your credit record might seem like it’s only about managing family finances better, and while this is true to a degree, there’s more to it.
Financial Health Impacts Your Credit Score
Late payments or exceeding your credit card limit can negatively impact your score.
Being on the electoral roll is essential for credit scoring – ensure your registration is up to date.
Surprisingly, even individuals with a perfect financial track record and significant savings can still end up with a poor credit score for reasons unrelated to money.
Check for Errors: Wrong Data Can Hurt You
Everybody makes mistakes – and credit-scoring companies are no exception. Errors on your file could unfairly damage your credit rating.
What You Should Do:
Check your credit report annually to catch errors early.
Always review your credit file before making any significant application, such as for a mortgage.
By staying proactive, you can ensure that mistakes don’t get in the way when you really need a clean record.
Watch for Mixed Messages
It’s easy for small inconsistencies to cause big problems. For example:
On one form, you list your address as Flat 6F.
On another, you enter it as Flat F6.
While your mail might still arrive, the systems at credit-reference agencies may not connect these as the same address.
Common Causes of Mixed Messages:
Data-entry errors from handwritten or online forms.
Minor inconsistencies over time.
Checking your credit file regularly will help you identify and correct these issues before they cause any problems.
Close Unused Accounts
It’s fine to keep a credit card for emergencies, but if you’re holding onto cards simply because you “haven’t got around to closing them,” it’s time to take action.
Why It Matters:
Every credit card on your file is viewed as available credit – even if you never use it. Lenders will consider these accounts when deciding how much credit they are willing to offer you.
Tip:
If a credit card is no longer needed, close it. This can prevent it from reducing your ability to borrow in the future.
In Short...
Maintaining a good credit record involves two key principles:
Ensuring your financial health remains strong (e.g., paying on time, keeping limits in check).
Regularly reviewing your credit file to ensure it is accurate and up to date.
By taking a proactive approach to your credit record, you can avoid unnecessary setbacks – whether you’re borrowing, renting, or applying for a job.
Whether or not you realise it, Experian, Equifax, and Callcredit have a huge impact on everyday life in the UK. These are the “big three” credit-rating companies. Their services are used for far more than simply assessing loan applications.
Businesses rely on credit-reference agencies for a variety of reasons:
Identity verification for age-restricted products, such as alcohol.
Assessing suitability for mobile phone contracts involving expensive devices.
Employers may also check credit files for roles involving financial responsibility.
This means that even if you have no plans to apply for credit – not even a mortgage – it’s still wise to keep your credit record in good shape.
Credit Records Are About More Than Just Money
Improving your credit record might seem like it’s only about managing family finances better, and while this is true to a degree, there’s more to it.
Financial Health Impacts Your Credit Score
Late payments or exceeding your credit card limit can negatively impact your score.
Being on the electoral roll is essential for credit scoring – ensure your registration is up to date.
Surprisingly, even individuals with a perfect financial track record and significant savings can still end up with a poor credit score for reasons unrelated to money.
Check for Errors: Wrong Data Can Hurt You
Everybody makes mistakes – and credit-scoring companies are no exception. Errors on your file could unfairly damage your credit rating.
What You Should Do:
Check your credit report annually to catch errors early.
Always review your credit file before making any significant application, such as for a mortgage.
By staying proactive, you can ensure that mistakes don’t get in the way when you really need a clean record.
Watch for Mixed Messages
It’s easy for small inconsistencies to cause big problems. For example:
On one form, you list your address as Flat 6F.
On another, you enter it as Flat F6.
While your mail might still arrive, the systems at credit-reference agencies may not connect these as the same address.
Common Causes of Mixed Messages:
Data-entry errors from handwritten or online forms.
Minor inconsistencies over time.
Checking your credit file regularly will help you identify and correct these issues before they cause any problems.
Close Unused Accounts
It’s fine to keep a credit card for emergencies, but if you’re holding onto cards simply because you “haven’t got around to closing them,” it’s time to take action.
Why It Matters:
Every credit card on your file is viewed as available credit – even if you never use it. Lenders will consider these accounts when deciding how much credit they are willing to offer you.
Tip:
If a credit card is no longer needed, close it. This can prevent it from reducing your ability to borrow in the future.
In Short...
Maintaining a good credit record involves two key principles:
Ensuring your financial health remains strong (e.g., paying on time, keeping limits in check).
Regularly reviewing your credit file to ensure it is accurate and up to date.
By taking a proactive approach to your credit record, you can avoid unnecessary setbacks – whether you’re borrowing, renting, or applying for a job.
