Whether or not you realize it, Experian, Equifax and Callcredit all have a huge impact on everyday life in the UK. They are the “big 3” credit-rating companies. . Businesses use their services for a whole variety of reasons. For example some companies use them to confirm a person’s identity, particularly if they deal in age-restricted goods such as alcohol. Mobile phone networks also tend to check with credit-reference agencies before they hand out expensive contract smartphones. Some employers check them, particularly if a job involves dealing with money. This means that even if you have no intention of applying for any credit in future (not even a mortgage), it can still be a good idea to keep your credit record looking good.
Credit records are about more than just money
When thinking about brushing up your credit record, your first thoughts may be about how to manage the family finance (better) as this does indeed have an impact on your credit rating. For example late payments or being over limit on credit card will set your score back. At the same time, even those with a perfect financial track record and plenty of savings to draw on, can find themselves with poor credit scores for a number of reasons. Whatever you do, make absolutely sure you are on the electoral role as this is a major point during credit scoring.
Everybody makes mistakes and that holds true of credit-scoring companies. Ideally you should make a point of checking your credit record every year or so, to give yourself the opportunity to have any mistakes corrected before you feel any need or want to apply for credit. You should certainly check your file before making any significant application for credit (e.g. a mortgage).
You fill in a form to apply for something and put down that you live in flat 6F. You fill in a form to apply for something else and put down that you live in flat F6. Your letters might still get to the right address but the computers at the credit reference agency might not make the connection. Even if you’ve always filled in your details in correctly, data from hand-written forms can be entered incorrectly and even forms submitted online can go wrong occasionally. Again, you can pick up these issues by checking your file.
Lack of closure
It’s fine to keep a credit card for emergencies, but if you only have a card because you’ve never quite got round to closing it, then close it. Very simply, every credit card you have on your file will be considered a card that’s available for you to use (which technically it is). This may impact how much money other lenders are prepared to offer you.
Having a good credit record is partly about general financial health and partly about making sure that your credit record is correct. Keeping your personal finances in good order can be made much easier by investing some time in visiting a qualified adviser for some professional financial advice.