Equifax explains what to do to get a good credit score

Equifax explains what to do to get a good credit score

Equifax is a leading provider of credit information and the company has just released information that shows around 30% of customers who are applying for a credit card online are rejected. Of this third, around 30% of them believe it is because they do not have a good enough credit rating. The company is therefore urging people to ensure that they have a good credit rating. Having a good credit rating will mean that consumers will be better able to take advantage of good mobile phone contracts and credit card deals.

Neil Munroe works at Equifax and he commented on the situation, “Whenever a lender is considering whether to lend money to a potential client, they will look at that persons credit history and this will tell them how reliable that person has been at repaying their debts. It is therefore vital that consumers pay their debts in time so that they can get loans in the future. If you fail to repay debts on time then your credit rating will fall and you may be unable to get a credit card in the future.”

“However, not all is lost for consumers who score poorly. At www.equifax.co.uk we offer online advice to people looking to improve their overall credit score. After all, it could be something as simple as not being registered to vote which is affecting their score. But even if it is something more serious, our expert advice is available to help consumers get back on track”.

TOP TIPS TO IMPROVE YOUR CREDIT SCORE

1. Are you Registered?
The electoral roll is used by many companies for identity verification purposes in order to combat identity fraud. It is vital, therefore, that you are registered on the electoral roll at your current address.

2. Are you credit active?
Not having many credit cards or loans can affect your credit score. Lenders are looking for signs that you are capable of repaying money you have borrowed. So it’s worth considering opening an account to establish a credit history – even if you pay it off in full at the end of every month.

3. Change of Circumstances
If your circumstances have changed and you have had difficulties keeping up with credit payments, then it’s important to say so, for example if you were made redundant or recently divorced and have fallen behind on credit repayments. You can place a Notice of Correction on your credit file explaining the background to any arrears, especially if you have now got back up to date. A lender will review this when assessing any credit applications you make.
If you believe a lender/company has provided incorrect information on your credit file, you can raise a Notice of Dispute with the Credit Reference Agency and they will take this up with the lender. This will usually be resolved within 28 days.

4. County Court Judgments
If you’ve had a CCJ and it is now settled make sure the settlement is recorded on your credit file. If not contact the court to get confirmation details and inform the credit reference agencies, otherwise it will stay on your file for six years.

5. Defaults
If you have a default on your credit file, it will stay on your file for six years and will affect your credit rating. This is when you can use a Notice of Correction.

6. Stop Applying
If you have been refused credit, obtain a copy of your credit rating. But DO NOT carry on applying elsewhere. Each search by a lender will leave a “footprint” on your credit file. Too many searches in a short space of time can be perceived by lenders as you over-stretching yourself financially and could therefore negatively affect your score.

7. Avoid a high balance
Avoid carrying a balance that is more than 30% of your credit limit. Lenders may view this as excessive debt and that you may not be able to keep up with repayments.

8. Be Direct
It’s easy to forget a payment so setting up direct debits and standing orders with your bank will ensure payments go out on time.

9. Close it Down
Make sure any accounts you don’t need or use are closed. Financial companies are paying more attention to the total amount of credit available to an individual and whilst you may not be using them, dormant accounts could affect your credit score.

10. Early Bird Catches the Worm
Try to pay off loans and credit agreements ahead of schedule. Lenders will look favourably on this.

Equifax recommends that anyone planning to make a new credit application obtains a copy of their credit file so that they can see exactly how their address is shown. This is how it will be checked by lenders. And if they believe the address is not properly presented, they can ask the credit reference agency to take this up with the lenders and the local authorities.

The Equifax Credit Report, with the facility to access credit information for the first 30 days free, is accessible simply by logging onto www.equifax.co.uk. Designed to help individuals understand their credit file and see what lenders see to assess new credit applications, the Equifax Credit Report also includes expert tips and advice to help consumers take the right steps to manage their finances and navigate through life’s challenges.

If the customer does not cancel before the end of the 30 Day Free Trial, the service will continue at £6.99 per month, giving them unlimited online access to their credit information and weekly alerts on any changes to their credit file. It also includes an online dispute facility to help them correct any errors on their credit file simply and quickly.