Credit ratings

Banks only want to lend money to people who are highly likely to pay it back. But how do you know if they will count you as one of these people?

One way they judge you (and they do) is to look at your income and expences and your previous addresses (see previous blog post). Another way they judge you is to look at your credit rating and the cool thing about this is that you can check on it before they do and make sure your rating is as good as it can be.

There are three main companies to check your credit rating with: Equifax, Experian and CallCredit/Noddle. Different lenders check different credit rating companies, so it's worth you checking how you come accross with all three companies. Setting up your account with them can take some time, but it is worth it. Equifax and Experian charge you £2 for your file, but CallCredit/Noddle will get it to you for free. Something as simple as not being on the electoral roll can count against you, but by checking your credit rating, you can see anything that isn't in your favour and change it.

Find out more about Credit Ratings on Money Saving Expert.