What is a credit rating/credit report?

Your credit report is a history of your previous payment records which allows companies to produce a credit score on you which is basically a numerical representation of your statistical likelihood to repay credit. The information held on your credit report is ascertained from public records like electoral roll information, court judgments, individual voluntary arrangements and bankruptcies and of course information provided by banks and building societies and financial institutions. When you make an application to borrow money the company you apply to will review your credit report and give you a credit score. This score is then used by them to identify the risk of offering you credit and the score will decide whether credit is offered and the interest rate offered . The report will also show them how often you have applied for credit recently. To get a good credit record you will have to show a track record of paying bills on time with very few or better still no missed repayments. Do not apply too often for credit. Loan companies will not give you the best rates if they see on your credit report that you have made lots of applications. If you are struggling to get credit because of a lack of credit history. The credit  card provider Vanquis offers a credit card that is designed for those with poor or a lack of credit history to help you build up a good credit history. Further information here

Who are the credit rating companies in the UK?

In the UK the main credit reference companies are Experian, Creditcheck, Privacyguard  and Equifax. If you are refused credit and believe you have a good credit rating it is worth checking your credit file too see what the problem is and if errors are found, you are entitled to apply to have them changed.

Identity Theft

In these days of increasing reports of identity theft a regular check of your credit file can be an early indicator of it. If you think you might be a victim of identity theft get a copy of your credit report asap to see if you can spot any unusual activities on the report.