Credit Ratings
What is a credit rating?
A credit rating is the rating that an individual lender will give you when they are looking at your credit record but you don't get a rating which is set in stone and which all lenders will give you which is why you have a situation where you may find that you are given credit by one lender but not another. Different lenders will come up with a different credit rating for you based upon different formulas.
What should my credit rating be?
Your credit rating is not something that you really need to know about, to be honest with you, because the credit rating, to some degree, is meaningless. What is meaningful is whether a lender is prepared to lend you money, and the criteria they're looking at will vary. You won't know what criteria they're using to do the check on you.
Who carries out credit ratings?
Who carries out credit ratings is a defunct question because your credit rating will vary depending on the lender. What is crucial is that the information that is held by the credit reference agencies - and there are three of them - is correct and up to date. As a customer, you're entitled to check what information is held on you about credit ratings. You should do that at least once a year if only to check that a fraudster hasn't used your details. If there is anything incorrect on there, you're entitled to provide information to set the record straight.
What can I do if I have a poor credit rating?
You can check your credit rating to see if you have a poor credit rating. If there's anything incorrect on there, you've got an opportunity to set the record straight. Beyond that, to build up a good credit rating, you should make sure that you're on the electoral roll and, of course, make sure that you pay your bills on time.
What is a credit check?
A credit check is the thing that a lender will do to look at your credit record and make a decision about whether they're prepared to lend you money and give you credit.
Who carries out credit checks?
The lender carries out the credit check. They look at your credit record and will decide, based on some of that information, whether they're prepared to give you credit, lend you money.
Why do I need to have a credit check?
It's in your interest to have a credit check because it's the way that the lender will make sure that they're satisfied that any money that you do borrow from them, you are able to repay. This is why it's so important that when you are filling out an application for a credit card, or any other type of credit, you give accurate information.
I have been refused credit, what can I do about this?
The first thing you can do if you have been refused credit is to check your credit record to make sure that you're satisfied that all the information on there is correct. You can check with the credit card company that has refused you and ask them why. You can apply elsewhere. Just because one lender has made a decision about refusing you credit, it doesn't necessarily mean that the next lender will.
What is a credit report?
A credit report is the information that you can obtain from the credit reference agents to get a full picture of the information that they are holding on you as an individual. You should get hold of those credit reports at least once a year, from each of the three credit reference agencies in the U.K., to make sure that any information held about you and your credit rating is correct.
