How to Identify Drawbacks to High Credit Ratings

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By now you must have realized the importance of maintaining good credit ratings all the time. Your credit score has an impact on your ability to get approvals for applications of mobile phone contract, loans, mortgages as well as credit cards. If your credit rating isn’t that good, there are a couple of tips you can implement to build your rating and fix all your credit problems. The following guide will give you the way forward towards identifying setbacks to your credit ratings, hence preparing you towards improving your credit ratings.

What has impact on your credit rating?

It’s always important to refrain from things that may impact negatively on your credit rating. The following is a highlight of some things that have bad impact on your ratings.

  • High debts. It is important to always maintain a lower level of existing debts as banks, lenders as well as mobile networks will be nervous at lending you more credit. High debt amounts indicate that you’re stretched financially.
  • Late or missed payments. If you have late or missing payments on anything, starting from your mobile network monthly payments, mortgages, loans, credit cards, gas to electricity bills, your credit rating will be negatively impacted. Note that the stain will stay as long as 6 years.
  • County Court Judgments or Decrees. If you get a judgment for any unsettled payments, your credit rating will be negatively impacted and will exist on your file for a period of 6 years.
  • High frequency of credit applications. When a single credit application is made, it will reflect on your credit report, hence many applications at a go or frequently will impact your report negatively.
  • Possession of dormant credit card accounts. Take note that lenders will always look into such credit cards to see how much credit is available to you, rather than just how much you are using.
  • Mistakes on the credit file. Usually, if any mistakes are included in your report, lenders will also include them during assessments. If there’s any detail that is not correct, such as someone fraudulently used your credit cards to make purchases without your knowledge, immediately contact credit reference agencies to have the matter investigated and rectified.
  • Absence on the electoral register. Lenders use your electoral registration information to confirm that you are who you claim to be.
  • Always moving homes. Lenders will be more than comfortable to grant credit to applicants who have maintained the same residence address for quite some time. Always make sure you are not changing your address frequently in a short time spun.
  • Being part of a joint credit with a person whose credit rating is poor can also impact on your own credit rating. Your ability to get credit will be affected if you have entered into a form of credit such as loans, mortgages or bank accounts with individuals with poor credit scores.

Once you’ve noted that your credit rating is not affected by the conditions listed above, it’s time to check your credit report to identify errors. Your report may have a poor rating due to fraudulent acts as well. You have a legal right to see your credit report at a fee of £2. The three agencies that compile credit reports in UK are Callcredit, Experian and Equifax. Equifax and Experian will grant you a free trial of the credit report services for 30 days, though you have to provide details of your credit card. Be sure to cancel before the 30 days period is over, less you be held liable for payments.