How is credit rating calculated?
When you apply for credit with a high street store or a credit card company, they will check your ‘credit score’ via one of the credit reference agencies like Experian, Equifax or Call Credit. Your credit score is a points system based on your known credit history. If you get a low credit score, you may find that you are consistently turned down for credit.
How do you end up with a bad credit score?
It doesn’t take too much to build up a bad credit history that will lead to a bad credit score. Things that could affect your score include;
- County Court Judgements
- Any missed payments on borrowings i.e. mortgages or loans, may reduce your credit score
- Being new to credit – people without a credit history have no payment records
- Not being on the electoral roll
- Falsifying details on credit applications – always tell the truth!
What can you do about a bad credit score?
If you have been refused credit, you can ask the lender which credit reference agency they are using and write to them. They are legally obliged to reply to you within seven days. If the information is incorrect you can ask to have it removed.
If you think you are suffering from a bad credit score unfairly and you don't actually have a bad credit history, you should check your credit rating. You can learn more about your credit rating with a free credit report from Experian by simply filling out your details below and clicking go:
If on the other hand you already know that you have a bad credit history, there are ways you can rebuild your credit score. A Vanquis Visa Card is one way to rebuild your credit record. See how to improve your credit rating page for more information.
