Everybody has a credit report, it’s just that we don’t always know it. It contains details of the loans and contracts we’ve taken out and how up to date we are with repayments.
Anyone we ask to borrow money from or set up a direct debit with will check our report to see if we’re likely to pay on time – not just bank loans or credit cards but things like telephone and broadband contracts, and gas and electricity too.
If we have a good credit report, we’re more likely to get better terms on loans and contracts, and we won’t have to have an expensive prepayment meter for gas or electricity, for example.
HOW TO IMPROVE YOUR CREDIT RATING
We can all improve our credit score, here are Experian’s expert James Jones top tips to get a better rating:
- Get on the electoral register
- Set up agreements to pay old debts
- Make sure your debts are registered to the correct name and address
- Borrow small amounts first and make payments on time
- Cancel unused credit cards
- Shop around for credit and only apply when you’ve found the best deal for you. Don’t apply for lots of things at once
- Apply for credit you are likely to get – useful tools on price comparison sites allow you to do this
- Never miss payments or make late payments if you can help it
- Don’t neglect repayment requests (you could be issued with a court judgment that stays on your credit report for six years)
GETTING A COPY OF YOUR CREDIT REPORT
Quids in! recommends getting a copy of your report if you’re planning to apply for something major like a mortgage, or if you’re having trouble getting credit so you can find out why. More and more these are available for free. Register with Credit Karma and you can see your credit score online at no cost:
THE RENTAL EXCHANGE PROGRAMME
It used to be that social housing tenants who rarely borrowed would have a poor credit rating just because they had no track record to be judged on. They might never have fallen into debt or arrears with their rent but this never counted in their favour.
Now a service dreamt up by credit agency Experian and the Big Issue Invest is levelling the playing field. If your landlord has signed up to The Rental Exchange they will share details of your regular rent payments with Experian.
According to Big Issue Invest, more than 70% of social housing tenants will improve their credit ratings simply by paying on time. It does, however, mean late payers will not benefit so much. Click here to find out more.