If you boost your credit rating, you can boost your chances of getting a loan or credit card and stopping any criminal activities.
It's incredibly important. Lenders place a lot of emphasis on this information when deciding whether to give you credit and also increasingly what to charge you, so you really need to do what you can to make sure your credit history paints the best possible picture of your current circumstances.
James Jones, Head of Consumer Affairs at Experian offers five tips to boost your credit rating.
The first tip is to use some credit and to use it and manage it sensibly. So take out some credit as lenders are looking for a track record and some positive evidence that you can be relied upon to pay any credit back that you're asking them for. So use some credit and make sure you don't stray over credit limits, make sure you make any payments you need to make on time and hopefully you shouldn't go far wrong.
Our second tip is to make sure you register on the electoral roll. Now this is very important, the information is included on your credit report and it's used by lenders firstly to help confirm your identity, and secondly it can be an element in credit scoring, so it's important particularly if you move to make sure you contact your new local council and register to vote. You'' just need to complete a simple form.
The third tip is to break any links with other people on your credit report that no longer apply. Now these days credit checks on your credit report will show information just about you, but you can be linked financially to other people if you've had joint credit in the past such as a joint mortgage, joint loan or joint bank account for instance. But of course circumstances can change, so if you're linked to someone that no longer is relevant to your financial standing then you need to tell us so we can actually break those links and make sure your credit rating is no longer affected by their data.
And it doesn't just have to be people you were in a relationship with, if you had joint utility bills for example maybe as a student or as a young adult, that can affect your credit rating as well. Any joint form of financial commitment like that could potentially result in a link on your credit report, so it's certainly something that's worthwhile keeping an eye on.
The fourth tip is to make sure that if you're making applications for credit you space them out if you can because every credit check leaves a footprint on your credit report, and lots of these footprints in a short space of time can be a signal to lenders that you might be in a financial pickle for instance, so it's something you should try to avoid.
The final tip is to really have a look at your credit report from time to time, make it part of your general financial housekeeping. Review your data and inform the credit reference agencies if there's anything you find that you disagree with and also have a look at thinks like utilisation. This is how much of your credit card balances that you're actually using - lenders generally don't like to see people that have maxed out on their credit cards so try and keep those balances certainly below 50%.