Your credit report is essentially an overview of your borrowing behaviour - a personal history of the credit you’ve had, from mobile phone accounts to mortgages and more, and lenders use it to help decide if you'll be able to make new repayments on time.
There’s information that confirms your identity - such as electoral roll details - information about previous credit applications you’ve made, and there’s financial information, such as a list of your credit accounts and repayments.
They may not expect you to have a perfect credit report, but they do want to know that you will make repayments on time and that you aren’t already over-stretched.
It’s best to check that your credit report is accurate and up to date – to give yourself the best chance of getting credit, getting the deals you want, and to help protect yourself from ID theft. With Experian CreditExpert, you can see your credit report and Experian Credit Score whenever you want, and get expert advice on improving your financial situation.
Why was I refused? What can I do now?Being turned down for credit can be disheartening, but you can take steps to help make sure it doesn't happen again.
First, understand why you were turned down - asking the lender is a good starting point and they should be able to tell you the main reason. You may be better off applying for a different credit product. As a CreditExpert member you can get help finding finance deals that suit your credit profile.
Perhaps you have missed some payments on cards or loans you have, or there are mistakes on your application form. Missed or late payments stay on your credit report for at least six years. It could be that you're not on the electoral roll, as that helps to prove your home address.
Making multiple applications in a short space of time can also make lenders believe that you’re in financial difficulties, or even a victim of fraud. Each application is likely to cause the lender to check your credit report and leave a credit application search footprint. Lots of these may cause alarm, regardless of whether or not you were approved, which isn’t actually shown on your report.
With a free 30-day trial of CreditExpert* you can see your credit report and Experian Credit Score whenever you want, and get expert advice on improving your financial situation.
How do I improve my rating?When you make an application for a loan, credit card, mortgage or other type of credit (such as a new utility contract or mobile-phone account), lenders look at your credit report to work out your credit score. So check your credit report regularly to make sure it’s up to date and accurately reflects your circumstances.
Your credit report lists your credit accounts, including loans, credit cards and your mortgage, along with your repayment record. Lenders use information from it to calculate your credit score, so it pays to make sure it’s accurate.
You can see your Experian credit report for free with a 30-day trial of CreditExpert*. Pay particular attention to personal details, such as your name, address and date of birth – even minor mistakes could lower your rating. If you find an error, contact the relevant lender and ask for an amendment.
Top tips on building a great credit rating:• Use some credit on a regular basis, but never take on more than you can afford.
• Stay within the agreed credit limits and always make your repayments on time, paying more than the minimum off your credit cards each month if you can.
• Space out your credit applications and avoid making several applications close together as this can signal financial stress.
• Make sure you register to vote at your current address - lenders use the electoral register to help confirm who you are and where you live.
• Get into the habit of reviewing your credit report on a regular basis, paying particular attention to the following:
- Make sure everything is accurate and up to date and query anything that isn't.
- Review financial links to other people and ask for any outdated links (e.g. to an ex-partner) to be broken.
- Explain any missed payments by adding a 'notice of correction' – a statement of up to 200 words.
- Review your credit utilisation rates (i.e. your balances versus your credit limits) and aim to keep them below 30 per cent.
- Credit scoring can look at the average age of your accounts, awarding extra points for longstanding relationships, so try not to chop and change all of your accounts on a regular basis.
Watch out for unfamiliar or suspicious entries in your credit report. With Experian CreditExpert* you’ll get alerts every time there's a major change to your credit report, which could indicate identity fraud.
Busting the myths around credit ratingsHere are the truths behind some of the more common misconceptions:
- There is no such thing as a credit blacklist. Lenders only want to be sure that you aren’t taking on more credit than you can comfortably manage. The information held on your credit report is simply factual and can mean different things to different lenders.
- Credit checks are done on people, not addresses. If you share or have shared an address with someone – whether a relation, a tenant or someone you don’t even know - your credit reports will not be linked unless you have had joint financial accounts or one of you has been a guarantor for the other.
- Past debts do count - court judgments for non-payment of debts, IVAs and bankruptcies and missed credit payments stay on your credit report for at least six years. Any of these could count against you, because lenders could think that you will miss payments with them too.
- Credit reference agencies like Experian can’t decide whether you get accepted or refused. That’s up to lenders, who use the information in your report, along with items from your application, when they calculate your credit score.
- Finally, your credit score is not set in stone, and there is no magic number. Each lender uses a unique method to calculate credit scores. Your credit rating changes along with your circumstances, so you can take steps to improve it. The Experian Credit Score, which you can see when you check your credit report through CreditExpert, is designed to help you understand how a typical lender will view your credit report information.
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