Checking your credit rating is like going to the STD clinic – sometimes you’ll have a hunch that you’ve done something stupid beforehand, and sometimes you genuinely won’t. Either way, you won’t know you’re in the clear until you make the effort to get checked out. And you should do it sooner rather than later.
Last week MM posted about what to do if you’ve been rejected for credit. Staying on that topic, I’m now going to talk about my personal experience checking my credit score so as not to be rejected in the first place. If you apply for credit and get rejected, that has a negative impact on your score, so checking your status beforehand is extremely important to avoid a downward spiral! Even if you’re not thinking of applying for credit in the near future, you should still check this as sometimes it will take you months or even years to patch up your record.
First of all, a quick bit of clarification: You do not have an invisible, constant credit score which is stored on a database somewhere for banks/whoever to check. Nor is there an official “blacklist”. Instead, your “credit score” is calculated using formulae devised by whichever institution/shark/goblin you are applying to for credit. In theory, they could put any nonsense into their a formula, but there tend to be common themes: annual income, previous bankruptcies/defaults, number of recent applications for credit and many more (for details see MM’s post). As such, you will get different scores from different lenders, and your score will change depending on your actions.
Now for all that ambiguity, you can get a good feel for how you stack up by using one of the following companies:
These guys offer you a free service which calculates your score (i.e. what they reckon it might be). Equifax and Experian are more widely used, but you have to sign up to a 30-day free trail and then cancel (If you don’t cancel it you will be charged a monthly fee).
- To cancel the Experian check, dial 0800 656 9000 (free phone). If that doesn’t work, you can dial (0115 935 6700). The free phone number requires a bit of a wait, so it’s a slight ball-ache best reserved for when you are in the office on someone else’s clock
- To cancel Equifax: Call 0844 335 0550 (020 7298 3000, and asking for customer services can also work). Quote your product reference.
- Callcredit is less widely used, but you can get a free account through noddle which lasts indefinitely.
Having put this off for a while, I finally got my act together and checked my credit score this week. I decided to check with Experian…
I was impressed. The checks found me on the electoral register, reminded me of a store card I’d settled years ago, and went back to my very first debit card. Perhaps more importantly, the report flagged that a phone bill I forgot to pay while I was out of the country getting drunk counts as a “missed payment”, and lowered the score I received from “Excellent” to “Good”. If I had gone to a bank looking for a mortgage or other loan, this issue may have resulted in me getting rejected. This would have lowered my credit rating further. Now I know what I need to fix before applying for any credit. Moral? It was good to check.