Ten things you (probably) didn't know about your credit record

Want a mortgage or a credit card? Before you even apply, check your credit record. 

The three credit reference agencies - Call Credit, Experian and Equifax - now hold an enormous amount of information about us, and any minor indiscretion will be used by lenders as an excuse to refuse a credit application. It is therefore vital to make sure that your record is accurate, up-to-date and as clean as possible - yet many people still do not understand how credit records actually work.

Here are some useful tips.

1. People who have lived in your home before you do not affect your credit rating. The only people that affect your rating are those you have a financial connection with – for example, a joint account or joint mortgage.

2. Registering to vote will improve your credit rating.

3. Checking your credit report will not harm your rating.

4. There is no “credit blacklist”. Many consumers mistakenly believe that lenders hold a database of blacklisted people that will never again be given credit. This is untrue.

5. Paying a mobile phone bill late will damage your credit rating. Always pay all bills on time to keep your record squeaky clean.

6. All applications for credit made in the last 12 months appear on your report – although the report does not detail whether or not the applications were successful. If you have made numerous applications recently, this will damage your record.

7. The size of your credit limit affects your rating. If you have large amounts of credit already available, such as an overdraft and credit cards, you are less likely to be given new credit.

8. Getting married or divorced does not affect your credit record. The record only notes financial connections – so if you are divorced but still have a joint account, your credit rating will still be linked to your ex-partner’s.

9. If a credit account is in default, this will stay on your credit record for six years.

10. If you do remove your name from a joint account, you should still tell a credit reference agency you want to "disassociate" yourself from that person.

Source: Experian

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Some useful guides

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Comments

[Bilbo]

Every country in the world is in debt to the IMF. How did this happen. How did the IMF get all the money. Who gave them the money. Is paper money really money?

[Bob]

Item 6 is a very good reason to stay away from internet sites which automatically submit loan requests to several sites simultaneously, I used one a couple of years ago and ended up with 4-5 searches in one day which harmed my rating for about 6 months afterwards

[Noel Dobson]

it was one of those so called Credit agencies that was ripping me off for a fixed amount each month just because they had got my credit card details. What I was getting in return was very unclear. I had let it go on without realising what was happening but when I realised their game I sent a recorded delivery letter to stop using my card details. I think that I cancelled the card as well. I did get all my money back via 'cash back' They still pester me but my mail monitor dumps their unwanted e-mail.

[wedding photographer colchester]

I always spend a small amount every month on my credit card. This keeps my credit record in good health so I can always get credit if I need it.

[Mark]

Number 6 is false!!!
"6. All applications for credit made in the last 12 months appear on your report – although the report does not detail whether or not the applications were successful. If you have made numerous applications recently, this will damage your record. "
Went to my branch of LloydsTSB and was refused overdraft because my name was in 3 unsuccessfull credit applications. SAW WITH MY OWN EYES my name on the computer screen! Clearly saying, "application ... REFUSED", for 3 loans I applied in the past 12 months. Thanks for that clerck that was very honest with me.

[rob]

Why anyone would want credit to get into debt I don't know. If you cnat afford something, save or go without.

To Bob - The IMF will eventually control the world because every country will be in debt to them. Its also privately owned.The Bankers win again

[Seraphimia]

To Rob: Perhaps you could spread some of your wealth around whilst you're spreading your useless advice.

Until you're faced with a situation that actually leaves you no choice, but to use credit to survive (lets just say I need to eat) you are in no position to judge a large section of the population on your lofty moral high ground.

Many people are simply trying to survive and are left with very little in the way of real choice.

I am, quite frankly sick to death of people like your who live with their heads in the clouds on what real people actually have to face.

Typical middle class, bane of our society.

[David]

I have no confidence in these companies and would like to see proper reform to their unfair tick box approach. I complained about a low score and was advised not to pay off my debenhams credit card and not to apply for credit within 3 mnths.
I had the debenhams card thrust at me when purchasing a suit for a wedding. It came with a 10% discount on the purchase and I was told that I could pay it off when I received the bill. I did!
My other sin was applying for a share investment account. The account offered no credit just the facility to purchase shares at low commission rates on-line.

Anyway, I'm disgusted with Experian who have advised me as above and also say there is no need to worry as lenders do not see the report or score!!! So what am I paying for?

Incidentally, I am very fortunate in that I do not need credit and have a healthy bank balance. My Bank have assured me that I am on their highest rating for credit.

Experian hav'nt heard the last about this!!!

[liam]

i understand shops need a method to identify the fake from the real customers worth.

But i still don't trust or like these companies.

They are in it to make money at your expense.

[AlanR]

I am lucky I have facilities I can call on when needed from my Bank as well as generous Credit Card limits.

However I will not pay for rubbish and probally have a rotten record. The most amusing however is the fact that I cannot play the National Lottery on line as Experian will not admit I exist as a genuine peson and they will not tell me why because they will not accept (not the Credit Card Company)my Credit Card payment.

My advice is to steer clear of these people after all the rating they give just is an indication to the loan company as to how much money they can make out of you.

[Tom]

Bilbo,

I don't want to sound facetious, but perhaps the best way to find out is to open up an economics textbook and get stuck in.

Tom

[Mark Chisholm]

Point 1. Hmmmm. My brother who was somewhat wayward for a while financially did not and does not have any bank connection with my parents. However one day they went to buy a TV on a good 0% deal. Except that they were refused credit despite being fairly well off and never having had bad debts. When they checked my brothers poor history had affected them because he lived in the same house. It took about six months and a lawyer to resolve the problem. Point 1 is not correct.

[Tracy]

Point 1 is wrong. The previous owners of our house had dementia and it was sold via Social Services to pay for their care. After being refused credit, I found that their appalling credit record was being associated with us and that they were still on the Electoral Roll (despite my having filled in a new registration), which took numerous letters and a couple of years to sort out.

[Carrie]

I have recently found out that I do not appear on the Register of Electors and haven't done for some years!
However, my daughter who is still at School is, she is often sent letters asking if she wants to sell her home and has a higher credit rating than I do.

Apparently she is a Home owner with no debts of any kind.

[Ian]

I also understand that not ever applying for credit can also be regarded as suspect so if you are prudent and apply for credit later in life for something important you can get turned down.

[aneel]

i want to know that if i check my credit report ...then the score of credit will decrease r not

[stephen Bull]

I requested a free credit report from Experian but never received the information to activate the request. After some months I noticed that they were debiting my card by £6.99 every month. They maintain that they followed the terms and conditions which I had accepted and refunded only one month's payment. Beware, my inattention cost me £80 and I have never seen my credit report.