Credit Rating Ever wondered why you’ve been turned down for a new purchase or a loan? Credit ratings seem to be a mystery to most people, as many don’t know their rights, how lenders make their decisions, how credit scores are calculated and how they can be challenged and improved.  The contents of your personal credit report can have a bearing on whether or not you are given credit. Factors other than the information held on a credit report may contribute to a lending decision as well (such as the information you provide on your application form), but your credit report is important. You have the right to view the information contained in your credit report to make sure it is accurate. If errors are found, you are entitled to apply to have them corrected. Having the ability to view and challenge your credit report is important, as; in addition to providing the basis for a lending decision, your credit rating may also affect the interest rate you are offered by lenders, which could lead to more costly borrowing. Credit reports are compiled by credit reference agencies using information from two main sources: 1) The Public Record: e.g. electoral roll information, court judgments, individual voluntary arrangements and bankruptcies. 2) Information provided by lenders and financial institutions: e.g. credit accounts, credit applications and financial associations. When you apply for a loan, the lender will typically contact a credit reference agency to check the information on your credit report, in order to help them calculate your potential creditworthiness and risk. These calculations are done by the lender and may vary between lenders. It is important to note that the credit reference agency does not offer any comment or advice and does not know how the information a lender has seen will affect the lending decision.You have a right to know which credit reference agency a lender has used. Incorrect credit information It is possible that the information on your credit file is incorrect, which would then affect your credit rating. Your credit rating may also be damaged if you have had problems paying utility or credit card bills in the past due to illness, redundancy or the breakdown of a relationship, for example. The only way to find out what information is held on you is to look at your personal credit file held by one of the two biggest credit reference agencies in the UK - Experian and Equifax. If you do find information is incorrect you can add a 'statement of correction' of about 200 words to your file, which will be supplied to lenders in the future. How can you improve your credit rating? 1. Make sure you are on the electoral register as lenders use it to confirm your name and address. Local authorities have also started compiling a rolling register for people who have moved, so you won't have to wait a year until a new list is compiled. 2. Ensure that you and other family members always pay your bills on time. A lender will see information relating to your other family members when you apply for credit and this may affect their decision. If you are estranged from your family, you can ask the agency to separate the files. 3. If you are turned down, don't then make a series of applications for credit in the hope of finding one lender who will give you money. These applications will also appear on your file and you may look desperate for money, or even worse, it may look as though you are trying to commit fraud. Credit Rating is also known as: credit_rating credit_rating_uk uk_credit_rating check_company_credit_rating company_credit_rating