Having a good credit history is very important when it comes to making an application to borrow money, and most people agree that credit ratings are extremely important. However, very few people actually know precisely what a credit rating is and how they’re constructed, so we’ve pulled together five key facts that will give you a much clearer idea about everything concerning credit.
A lot of people say “it’s too complicated to check my credit history” but it’s actually very easy with companies like CreditExpert and time extremely well spent. You have the right to see your credit rating and to make sure that any errors that are on it are corrected immediately. Most of the time the credit companies will do amend any errors for free. Bear in mind that simple things like old mobile phone contracts that were never fully cancelled can have an effect, so it’s good to do a spring clean at least once a year.
Black Lists Don’t Exist
Each lender has their own criteria of what represents the perfect customer, and it might not necessarily be the same from lender to lender (in fact, the odds are that it’s not). So, just because you’ve been turned down from one bank doesn’t mean that you’ll get turned down by another. However, it’s a good idea not to make too many applications in quick succession, as each time you do a ‘search’ will be carried out on your credit rating, and too many searches in a short period could raise the alarm.
Profit Is More Important Than Risk
Most people assume that the banks decide who they’ll lend to on a basis of risk. If you’re not likely to pay back any debt in full, they shouldn’t lend. Unfortunately, that’s not the case, if you have a perfect credit history, never have credit card debt and pay everything off in full as quickly as possible you could still be rejected because you won’t make the bank very much money. This is rare but it does happen.
Use Your Rights
As mentioned above you can correct any errors on your credit report simply by writing to the credit agency concerned, however, sometimes you may have to talk to the company who filed the report, rather than the credit agency. There are a whole strings of rights attached to credit reports, and you should never have to pay to have something amended. If you’re having real problems, you can always talk to the Citizen’s Advice Bureau.
Your Credit Score is Not Fixed
You may have seen adverts for products that will ‘repair your credit score’ and these will usually cost you money without making any difference to your score. However, there are a whole list of things you can do to improve your credit rating, whether it’s something simple like getting on the electoral roll, or cancelling an old phone contract. So, if you do check your rating and it’s not so good, there’s no need to fear the worst.
source: christianfinanceblog.com
