Your credit score is an important part of your life, and you might not even realise it. From the way you pay back your mobile phone contract, to paying off credit card and store card debt, as well as any payday loan agreement you have in place, your credit file will have an impact. Everything you do financially will impact your credit history, both positively and negatively. If you do not have a clue about your credit score, it is important that you begin to take stock of your financial situation and look at the importance of your credit score for your future. From there you can begin to work out what can have a positive impact on your credit file, and what aspects of your life can be changed to prevent the drip-feed of a negative credit score.
There are three credit agencies in the UK. Each has its own defined and unique way of developing and analysing your credit score and file. You have the right to ask for access to your credit file from each of:
Because each Credit agency has a completely different way of rating your credit score, it is possible to have a positive record in the eyes of one agency, and a negative one in another. The first thing you should do if you have no idea about your credit score is to ask for a free view of your file from each agency. Many things can have an impact on your credit score and if you are looking to build up a credit score you should first check for inaccuracies in your credit file. Make sure that all the information held about you is accurate and up-to-date before looking into any greater detail at the other reasons behind your credit score (whether positive or negative).
Changing your credit score from bad to good can take some time, but with a methodical approach and a clear goal it is achievable for every person, no matter how difficult a financial position they might currently be facing.
The first thing to do to ensure you are building towards a positive credit score is to only every borrow what you can definitely afford to repay. You must, at the very least, be hitting the regular minimum repayments every month. This can be achieved by setting up direct debits to ensure you never miss a payment to any regular bill that you have. If you have the chance to pay off credit in full, always take that opportunity.
Another thing that often gets overlooked is that registering to vote helps a credit agency to verify that you are who you say you are and that you live at the address you have given. This can be important when applying for any form of credit. It is important to always be regular with your payments, and to understand the ins and outs of any repayment terms you currently have to pay off debt, including your mortgage, mobile phone contract, or payday loan.