Perhaps you’ve previously signed up for credit cards – maybe to take advantage of an interest-free introductory period or for the cashback rewards – and have then stopped using them.
Are the accounts still active and how do you find out?
Well, keeping an eye on each line of credit you have open is key to ensuring your credit history is correct and up-to-date. Not doing so could affect your ability to borrow in the future.
So how do you check?
Well this is actually quite simple to do. For details on all the credit you’ve taken out, including any credit cards, loans, mortgages and even your mobile phone provider, you need to look at your credit history.
When you take out credit, your lender will notify the three main credit reference agencies – Experian, Equifax and TransUnion. The agreement will be noted on your file along with any negative marks like a missed payment or a County Court Judgement (CCJ).
And because your credit history is a record of your borrowing going back over the last six years or more, even your closed accounts will remain on your file for a set period of time.
You can check your credit history by simply signing up to one of the above credit reference agencies, all of which offer a free credit-checking service (CreditMatcher, ClearScore and Noddle, respectively).
Keep tabs on your credit history
It’s important to keep a close eye on your credit history for several reasons.
When you apply for credit, lenders will look at how responsible you’ve been with borrowing in the past by looking at your credit history.
So any mistakes, such as missed payments, could jeopardise your applications and your ability to borrow. If you do come across an error on your credit history, don’t worry – there are ways to amend these. Find out how to do this here.
Checking your credit history regularly is important to minimise the chances of you becoming a victim of financial fraud. By keeping track of any accounts opened in your name, you can be quick to report anything that appears suspicious.
If you have several unused credit cards, it might be worth closing your old accounts.
Having a lot of credit already available to you could negatively affect any application you make for further credit. The lender may worry that if you maxed out each of these accounts, you could struggle to make both these and your new payments. This may put them off lending to you.
But you don’t need to rush to close all your credit cards. Remember, each lender’s criteria and application process is different.
By using credit responsibly – keeping up with all your payments and only borrowing what you can afford to pay back – you can gradually build up your credit history and show lenders you’re a trustworthy borrower.
This may open you up to interest rates that are more competitive when you apply to borrow again in the future.
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