It’s easy to assume that your credit score is fine – after all, you’ve got the credit cards to prove it. But in today’s climate, it may need to be better than good if you’re to get the deals you want and it’s all too easy to let that magic number tumble without even realising it.
Taking care of your finances is of paramount importance if you want to ensure your credit rating remains healthy – not doing so may result in you not being able to get the deals you want.
Here are five everyday ways that you could unwittingly ruin your own credit rating.
Ignoring your credit score
It changes as your circumstances change, so it’s crucial to stay on top of it. That means making regular checks on your credit report, which lenders use when they calculate your credit score. It lists your credit accounts, from your mobile account to your mortgage, along with your repayment record. Watch out for minor errors, such as duplicate accounts, that could knock points off and ask the relevant lender to correct them. You can see your Experian credit report and score for free with a 30-day trial of CreditExpert.
Skip or delay repayments
A missed or late payment stays on your credit report for at least three years, warning other lenders that you may not be reliable (and reliable, responsible borrowers score more highly). Set up direct debits for regular payments so you can’t forget and, if you’re having a difficult month, talk to the lender and explain – they may give you some extra time or reschedule the payment.
Let your personal details get out of date
You might earn a decent salary and pay all your bills on time but if personal details such as your name and address aren’t correctly recorded in your credit report, your score may suffer. It is best to ensure you register to vote at your current address – lenders use the electoral roll to see that you live where you say you do.
Apply for lots of credit at once
Never fire off lots of random applications in the hope that someone will give you the deal of your dreams. Each application will leave a trace on your credit report – if other lenders see it, they may worry that you’re desperate for money or even suspect a fraud. Instead, do your research carefully and only apply when you’re sure you’ve found the deal that matches your circumstances.
Think going bust is the way out of your problems
Most bankruptcies are discharged in a year but don’t assume that’s the end of it. The fact that you’ve let lenders down will be recorded on your credit report for at least six years, making it difficult for you to borrow and trashing your credit score.