For people worried about their debts, MyCallcredit has issues advice to repair credit ratings
Improve your credit rating
Wednesday, 25 May 2005 12:20
Brits worried about the state of their credit ratings, have been given a how-to guide on improving matters.
Credit ratings are important because they are consulted before lenders decide whether to agree to loans, credit cards, or mortgages.
A credit rating is a record of how likely someone is to pay back debts; it is created through a combination of publicly available information, like county court judgements and bankruptcies, and information provided by lenders.
Based on this information credit reference agencies assign consumers ratings, which the consumer has a legal right to check.
"So many different aspects of your life affect how a lender will view your suitability as a borrower and some of them aren't that obvious. So if you want to be sure of obtaining credit in the future you need to take control of your credit history," said Alison Nicholson, director of MyCallcredit.
And MyCallcredit pointed out today that with six out of ten people in the UK unsure of exactly how much they owe, damage to credit ratings through fraud or forgetfulness might go unnoticed.
Experian and Equifax are the two biggest credit rating agencies in the UK, and applications to view credit reports can be made from £2. People who are worried about identity fraud, or have been unexpectedly been turned down for a loan, are generally advised to apply to view their credit report.
For those who find their report is less than flattering, the Callcredit agency has produced a guide on how to improve or build up a credit file.
Pay mortgage, credit cards, mobile phone and utility bills on time - even a late payment can affect your credit rating.
Remember anything that you pay for on direct debit or on a payment plan is likely to appear on your credit file.
When you decide not to use a credit card or current account don't just cut up the card - inform the lender, the facility will be registered on your credit file until you do.
Make sure your credit file is disassociated from the people around you to whom you have no financial connection, eg housemates or family members.
Check your own credit file regularly to make sure the information held is correct.
When you move house contact the local authority to ensure you are added to the electoral role as soon as possible.
Inform any company who has provided you with a credit facility when you move address.
If you are declined credit, ask why - you are entitled to know. If information on your credit file is inaccurate you can have it corrected.
If you are having financial problems inform the lender sooner rather than later - most will be sympathetic and work with you to find a solution.
Do not pay for advice that comes free - debt counselling is provided free by the Citizen's Advice Bureau, Consumer Credit Counselling Service and National Debtline.
Do not pay to have incorrect information removed from your credit file when you can do it yourself. Credit Repair Agencies claim to be able to remove county court judgements from your file for a fee - if it's possible you can do it yourself.