UK Consumer Credit Referencing


5 Ways to Improve Your Credit Score in the UK

Credit Blacklist

For those that are worried about being on a credit black list (which admittedly is a scary thought), stop your worrying right away! In all seriousness, there is no credit black list as such, and credit agencies in the UK only hold factual information about individuals. The credit agencies themselves offer no opinions to credit lenders as to whether they think you can pay back your loan (your credit worthiness), they just have a set off hard facts that either tick a few boxes or they don't.

Credit Agencies

There are various credit agencies in the market, and each of them even suggest you contact the others to make sure they don't hold a piece of information that may be unique to them or inaccessible otherwise. Checking with most of the companies will give you a wider look at what is affecting your credit score, and this will help you to pin down where you might be experiencing credit problems. The main agencies that hold credit files are Experian, Equifax, and CallCredit. One way to start is to get your credit report from a service such as which partners with credit agencies to provide access to your credit report free.

Credit Data Sources

Credit agencies hold details that come from two sources, they then share this information with lenders after you apply for credit. The first source is public record information - the company will check whether you are on the electoral roll at your current address. Checking this information is key to making sure your credit score is in good shape, as many people can miss this, or forget after changing address. The second source of information comes from lending companies such as banks, with the agencies checking your previous lending data, to see if you have kept up with payments in the past.

All of the major lending companies share information with one another, so when you have bad credit with one company it is not as simple as switching to somewhere else to start borrowing from them. There are much more effective solutions to improving your credit score, and none of them involve borrowing large sums of money from one place to pay off another - in fact that's one sure fire way to end up in a worse situation than the one you started in.

What is a Credit Score

The credit score is really a calculation used by the agencies to put a numeric value on the credit risk which a person appears to represent, based on the information available. The credit agencies analyse the characteristic of people who have previously defaulted on debts and loans, compared to people that do not default. From this they profile the indicators of high and low risk. Put together the result is a score for each person – their credit score.

Improve Your Credit Score

You should begin your quest to credit score enlightenment by making sure that all of your debts and outstanding payments are registered to your current address. It's no good leaving them to pile up at the bottom of your previous flat's letter box, as outstanding debt left for too long can leave a red mark on your account that will only be removed after a certain amount of years. This of course can be stopped through discussion with your debtors, whereas leaving the letters unanswered will just cause further financial difficulty.

Register with a credit agency to check what your score looks like; the agencies will offer tips and hints on how to alter your specific situation, and you can make sure there are no mistakes on your file - sometimes other people's debt can make its way on to your report. While this is a rare occurrence, it's always good to check.

Don't blanket apply for credit even when you're not doing so out of desperation. This rule goes for phone companies as well - applying for mobile phone deals, credit cards, cars on finance or even just picking up a TV on a monthly pay deal within a short amount of time can appear to future lenders as desperation. Space it out, take your time, and most important of all, don't panic.

It sounds like an obvious one, but try your best to stay up to date with all of your current payments, and if you're having trouble doing so ask if you can change the payment plan you are on. Communication is key to success, make yourself available to loaners and debtors, and contact them directly if you're ever in any doubt. Set up automatic payments such as Direct Debit or Standing Order for all your major regular bills – the chances are that these companies share your payment records with the credit agencies, so paying promptly will mean your payment records are good. Over time you should end up with a good payment history. By setting up regular payments you also avoid the potential for a missed payment  - and subsequent black mark – such as being away on holiday or mislaying a bill before paying it.

If your payment records and credit history is thin, or you have none, then it may even make sense to apply for a very small amount of credit or an account with a company that will share data with the credit agencies, ensuring the amount of credit is well within your means to repay, then making sure to make the monthly payments promptly. However don’t enter into anything that requires more borrowing than necessary or comfortable, and don’t pay high interest rates or get caught with hidden charges.

If you need to contact the credit agencies directly about information on your credit file you can do so after obtaining your own credit report. Each will have it's own contact procedures. The main agencies are Experian, Transunion, and Equifax.

Doing all the above should help boost your credit score with all the main credit reference agencies.



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