How to Protect One's Credit Rating

What an Individual Can Do to Improve Their Credit Score

Oct 2, 2008

A credit score gives a person's financial history. Credit is almost essential for most people in this day and age, so what can they do to ensure a high credit score?

A credit score tells financial institutions how a person conducts their bank accounts, credit cards, mobile phone, etc, and how credit worthy they are. A credit rating can determine whether or not an individual can obtain a new credit card, mortgage, or loan. So how can an individual find out their credit rating, and improve it if necessary?

Understanding and Checking One’s Credit Rating

Everyone should check their credit rating fairly often, perhaps once a year. There are companies and websites which can do this, and they can be easily found by doing a web search.

How to Make Amendments to Your Credit Rating

If there is something unexpected in a credit report, it is possible to write to the credit agency and ask for it to be amended or investigated. This is essential, as even minor errors can cost future credit opportunities. In some circumstances such as missed payments due to illness, it is possible to add a short note called a Notice of Correction, which future lenders must read. Anyone who has settled any County Court Judgements, or if a bankruptcy has ended, should make sure such things are shown on the record.

What Else Can Affect a Credit Rating?

It is important to be on the electoral role, as being able to verify an address is important for financial companies. Always making payments on time is very important, and anyone having problems making payments should contact the company immediately so as not to affect their credit rating. And everyone should check for anything unusual or unexplained on the rating, since identity fraud is becoming more common. Also, in the case of joint accounts or loans, the other person’s history will be taken into account.

Sometimes people who expect to have a good credit rating are refused new credit cards for no apparent reason. This can be because they have a number of applications within a very short time. This may simply be research for a new credit card, or trying to make the most of special offers by credit card companies. But it may appear to a lender that the person has applied for an unmanageable level of credit, or they may even suspect fraud. It is best, therefore, to not apply for credit too often.

Above all, one should always tell the truth on applications. Lenders can quite easily tell if someone has lied, and this can cause difficulties in future applications for credit.

Those who follow the above rules should have no problems…but it’s always worth being careful.

The copyright of the article How to Protect One's Credit Rating in Personal Budgeting/Finance is owned by Helen Krasner. Permission to republish How to Protect One's Credit Rating in print or online must be granted by the author in writing.