How to check and improve your credit rating
Confused or worried about your credit rating? Find out what it means, how to check yours for free plus tips to improve your score.
There is a lot of confusion surrounding credit ratings, especially for students. Rumours are commonly banded around about ‘blacklists’ and student loans being included in your credit rating.
This guide is here to tell you why your credit rating matters and how it could affect you. Plus we’ll help you to check your credit score for free before sharing a few ways to improve it as a student.
What’s in this guide?
In simple terms, a credit rating is a grading system used by banks and lenders when you are applying for a bank account, credit card, overdraft, mortgage and other financial products.
The most common instance when a student might want to check their credit rating is when opening a student bank account, specifically in getting the highest amount of interest-free overdraft.
It can be well worthwhile building up your credit score whilst at university as you will inevitably look to take out a mortgage or credit card in the future.
Although it is a common myth, there is no credit score blacklist and your credit record is not held on a single database. Your records are held by three major credit companies: Callcredit, Experian and Equifax.
Your credit rating is just one factor in a bank’s decision. Every bank or lender will couple your rating with data of their own. For example, from the application form or internal credit history. Whilst there are lots of factors involved, you can help yourself by being aware of and taking care of your credit rating.
Nobody is sure of the exact calculation used to get your credit rating and the agencies all use different factors when ranking you. This is why it’s best to check with all three (see below).
However, we can be sure of which factors are taken into account and which definitely aren’t…
They will check:
- Past bank dealings
- Utility payments
- Mobile phone contract payments
- Credit card history
- Loan history
- Building society history.
They won’t check:
- Student loans – Contrary to common belief, student loans do not have any influence on your credit score!
- Parking fines
- Whether you have checked your credit rating
- Salary (although the bank will check this)
- Gambling activityCriminal records.
If you are concerned about your credit score or are simply curious, then it is possible to check your records with all three major credit agencies for free on a trial basis.
The credit referencing agencies tend to offer a free trial of a few weeks when you sign up. Once you have received your free credit report go right ahead and cancel your subscription with them. Use the links below to check your credit rating, we have ordered them roughly in order of importance and ease of cancellation.
Experian is the UK’s biggest credit referencing agency. Your personal report can only be accessed through Credit Expert who give you a 30-day free trial for new users. However, a monthly fee of £14.99 applies after your free trial. You may cancel during your 30-day free trial without charge. Free trial period starts on registration – further ID verification may be required to access full service which may take up to 5 days.
Basically CreditExpert continuously monitors your Experian Credit Report and alerts you to certain changes and potential fraudulent activity and you can view it as often as you like. If anything is incorrect, just tell Experian who will help.
This is the second largest agency, and the Equifax free trial is also 30-days long. Thereafter the charge is £9.95 a month.
Please note that monthly fees apply to the consumer following the 30 day Free Trial of these products if the user does not cancel within the trial period. The monthly fees are £14.95 for the Free Credit Score and £9.95 for the Free Credit Report. A user can cancel their subscription with Equifax at any time.
To cancel call freephone 0800 090 2219 with your reference number to-hand.
This agency is little used by banks and other lenders, but you can still check it for free through Noddle. Just be aware they may attempt to sign you up for financial products you don’t need.
Remember that each referencing agency will grade your score differently so it’s best to check all three to get a good overview of your situation.
After checking your credit reports (see above) you be worried about the score you’ve been awarded. You can do something about it!
Make sure that everything is correct
If you do not agree with something in any of your credit checks then you will need to make sure that it’s changed. You can do this by calling up the credit company themselves and asking if they will look into it. They may require you to contact the company that has given them the wrong data (eg. your mobile phone company) to amend it.
Get a credit card, then cut it up
You can improve your credit rating just by taking out a credit card and cutting it up. This works because, whilst you have been offered credit (money) you are free to spend, you have displayed financial discipline and moreover don’t owe any money to the bank. For more details on credit cards read our full guide on credit cards for students.
Pay all bills on time
The simplest way to improve your credit score is simply to make sure that you pay all of your bills on time. That includes utility bills, mobile phone contracts, rent and any form of loan repayments.
Get on the electoral role
If you aren’t on the electoral role then you won’t have a credit score at all. A lot of students fall foul to this one because after moving from home many don’t register with a new address.
If you are unsure how to do this then check and register on the About My Vote website.
Space out applications
A lot of credit agencies will check the times that you have applied for things. As a student you may have to apply for lots of things all in one go but make sure you can spread out your applications for any extra finance and only apply if you really need to. If you are denied credit at any point, wait at least 30 days before making a reapplication.