I imagine that credit scores have been around in some form for a long time.  Back in the days of the Victorians the bank manager probably walked round to the local grocer and said, ‘Karl wants a loan, does he pay his bills on time?’  But it did come as a bit of a shock to me when I realised, a few years back, just how much information my credit report holds on me and just how important it is.  If you want a mortgage or a loan, it’s the credit report on you that will determine what kind of rate you’re offered and whether they’ll lend you any money in the first place.  Your credit report knows everything there is to know about your debt history.  It knows about the debt level of your credit cards, how you pay your bills, where you live and work, if you’ve defaulted on mortgage payments, had a vehicle repossessed or filed for bankruptcy.  It’s pretty hard to keep anything secret in the twenty first century, but that’s the way it is and so it makes sense to make sure that your credit report shows you in the best possible light.  If you don’t know your credit score you can easily check it with Experian. You can also read about bad credit and frequently asked questions here. Try some of these tips to help you improve your score.

Register to vote
Of course, the main reason for registering to vote is so that you can have your say.  It’s a right that was fought for and you shouldn’t ignore it, but if that doesn’t persuade you, be aware that if you aren’t on the electoral roll you might find it very difficult to get a loan, insurance or credit card.  When you apply for finance the lender will check your credit report with three main organizations: Equifax, Experian and Callcredit.  These organizations all use information held on the electoral roll to verify your identity.

Cut up old credit cards?
Just before you reach for the scissors you need to be aware that closing a credit card account with a zero balance may adversely affect your credit rating. Even though you’re not using the card now, your financial history of using the card could go in your favour. However if you’ve never used the card and have no financial history to show, a large amount of unused credit could put off potential lenders, as theoretically you could spend it all in one day and therefore be in a worse position to pay off lenders. Unfortunately there’s not a simple answer here when it comes to cancelling credit cards as lenders are all looking for different people, so it’s best to do your own research here depending on your circumstances.

Close joint accounts that are no longer in use
Lenders don’t like you to have access to too much credit because of the possibility of falling into uncontrollable debt.  You also need to be aware that if you hold a joint account, lenders will look at the credit reports for both people when assessing your credit rating.

Spread out your credit applications
Every time that you apply for credit a search is performed and recorded.  If you make lots of applications in a short space of time you will appear desperate and scare off lenders.  For the same reason, if your credit application is declined, don’t immediately try again.

Karl Young

Part-time daddy and lifestyle blogger. Father of 2 boys under 2. Golfer, scare-fan, tea-lover, traveller, squash and poker player. I write on the @HuffPostUK http://www.huffingtonpost.co.uk/karl-young/

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