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 activity
- Criminal 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 report 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.
Credit Reports Matter
You can check your Callcredit score through creditreportsmatter.co.uk for free on a 10-day trial. If you do not cancel then you will be charged £14.99 a month thereafter. You can cancel online via your account settings as soon as you get your credit report.
Remember that each different company will grade your score differently and that it is best to check all three to get a good overview of your situation.
Checking your Experian credit score with Credit Expert is also recommended. You can sign up for a 30-day free trial, and again just remember to cancel to avoid the £14.99 a month subscription thereafter (unless you actually want it).
To cancel simply call the free phone number 0800 561 0083 as soon as you have checked your score and report.
The Equifax free trial is 30-days long and the charge is £6.99 a month after this. They will charge a £1 card check but if you cancel in time this will not affect you.
To cancel call 0844 335 0550 with your reference number to hand.
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.