Money Articles

Credit rating is a widely-used tool that enables banks and other lenders to rate the people who want to borrow money from them. The system rates your behaviour as a borrower if you are late with payments or default on credit agreements or whether you make payments on time and to the correct amount. In this way, lenders can see who they should lend to and who not. Another part of the system is poor credit rating finance, which is useful for borrowers who cannot obtain credit from other sources.

As credit is now an important part of family finance, a good credit rating can be important to people who wish to borrow. As poor credit rating finance can sometimes be more expensive than other types of credit, it is worthwhile trying to maintain or even improve your credit rating in order to receive cheaper finance. Credit rating can be improved using the products you do have well, and giving institutions as much information as you can by holding a bank account and paying your wage or other money into it as regularly as possible. Note that missing payments, defaulting on credit agreements, going overdrawn without agreeing an overdraft limit with your bank or in any other breaching of the terms of a credit agreement will be stored by credit rating agencies for six years, thus harming your chances of obtaining good quality credit in that time.

For more information on credit rating, please see the websites of the main credit rating agencies:

Experian: 0844 481 8000 or www.experian.co.uk

Equifax: 0870 010 0583 or www.equifax.co.uk

Callcredit: 0870 060 1414 or www.callcredit.co.uk