Why should I check my credit rating?

Why should I check my credit rating?

author: Bryony Pearce

By Bryony Pearce


When’s the last time you checked your credit rating? Can’t remember? Or even worse, not at all? Well here are four reasons you might want to think twice moving forwards.

Your credit rating plays an important role in whether or not you’re accepted for credit. Current and future lenders will use it to work out what kind of borrower you are and, ultimately, whether or not to accept your application for credit.

Despite its importance in the credit world though, many of us don’t take the time to actually check our credit rating, which can prove incredibly damaging. Before we move onto the ‘why’ though, let’s take a quick look at the ‘what’ and ‘how’.

What is your credit rating?

Your credit rating (also sometimes referred to as your credit score) is a representation of how well you’ve managed money in the past. In other words, whether you’ve repaid previous credit back on time and in full.

In most cases, the higher your number, the higher your rating. Although a low credit rating is by no means the end of the road when it comes to credit applications, it does indicate to lenders that you’ve struggled to responsibly manage money in the past, which can:

a) reduce your odds of being accepted; or

b) increase the interest rate you’re given if you are accepted.

How to check your credit rating

Equifax, Experian and CallCredit are the main credit reference agencies in the UK, and you can check your credit report either online on their websites or by asking for a written copy.

If it’s your first time checking your credit rating, it might be worth checking your report through all of the main credit agencies. The reason for this is that each could have different information from different credit providers, allowing you to easily compare your score across the board and spot any changes and irregularities.

Why you should check your credit rating

Improve your score

According to research, 7 in 10 people who checked their credit report once a month noticed a positive impact on their credit behaviour. So, simply checking in now and then could help you improve your credit rating which not only increases your odds of being accepted, but opens you up to better deals, too.

Assess your suitability

Checking your credit rating will give you a feel for where you stand in the world of credit. If your credit rating is spotless, you’ll know there’s a good chance you can bag a credit deal with an attractive interest rate and perks.

On the other hand, if your credit rating is a little worse for wear, it might be an indication that you need to a) hold off applying for credit until you’ve improved your credit rating, or b) apply for credit designed for people with less-than-perfect credit histories.

Either way, you’ll be in a better position to source suitable lenders before you apply, which’ll reduce the likelihood of being rejected - and remember, hard searches appear on your credit history, so each rejected hard enquiry will leave a mark on your file for all future lenders to see.

Flag any mistakes

The more often you check your credit rating, the sooner you’ll be able to spot and fix any mistakes. If you think there’s a mistake against your name - for example, if a lender’s accused you of missing or making a late payment, you can contact them directly and ask them to investigate the inaccuracy. If they admit fault, they’ll then report back to the credit reference agencies to make sure the mistake is removed.

If the lender doesn’t admit fault then you’re not out of options. You can lodge what’s known as a Notice of Correction which is a note on your credit report showing current and future lenders you’ve disputed the entry.

Either way, spotting and doing what you can to fix mistakes will help to ensure your credit rating isn’t unnecessarily knocked down and holding you back when it comes to applying for credit - which, without checking, it could be.

Identify fraudulent activity

Last but not least, frequently checking your credit rating will help you to keep on top of any fraudulent activity (like crooked spending or applications) - and nip it in the bud if it does arise.

This’ll not only help to limit the damage done to your bank balance, but it’ll enable you to quickly correct the activity on your credit file, which will in turn help ensure your credit rating doesn’t take a hit.

And that’s a wrap. If we’ve sold you on the importance of checking your credit rating and you want to delve into the ‘how’ in more detail, head over to our in-depth ‘How to check your credit rating’ guide.

And for more insights, advice and answers on all things credit-related, check out our dedicated section on it here.

Disclaimer: All information and links are correct at the time of publishing.

author: Bryony Pearce

By Bryony Pearce

Why should I check my credit rating? Why should I check my credit rating?