Your credit score affects many of the financial aspects of your life, including applications for payday loans, mortgages, and even for rented housing. Therefore it is important for you to have the best credit score you can. However, sometimes there are factors that can negatively affect your score. Luckily, some of these factors can be easily rectified to put you in the best financial position!
Not sure what’s actually in a credit file? Learn more here!
Credit score reports typically contain a lot of information, including your name, address, current employment, credit history and more. You can easily check your credit score and credit file for free on Experian, so if you’re thinking of applying for credit in the near future, you should check your credit file first to make sure there are no errors present.
Any mistakes in your credit application or mistakes in your credit file can have a seriously negative effect on your credit score. Credit companies are much more likely to reject an application that has present mistakes.
There are several common mistakes made on credit files that should be fixed as soon as possible:
Mistyped or wrong National Insurance Number — Your National Insurance Number is linked to your identity from the moment you’re eligible to start working. Numbers are often quite similar, which means that a mistype could mean that your employment history comes up as someone else’s. You may be in a full-time job, but someone with a similar NI Number could be unemployed.
Repayment history — If you’ve had loans or credit cards in the past, you will have had to make consistence repayments. These repayments appear in your credit file so that when you apply for credit again, the financial lender can see that you are a responsible person who makes their repayments on time. In regard to this section, in particular, we’d like to offer some advice: If you’re applying for new credit, ensure that the new lender reports your repayment history to help you build your credit.
Incorrect address — We briefly mentioned this above, but an incorrect address can lead to credit accounts being merged or a lender finding the wrong account for you. Some financial lenders base their rates on where you live, which means an incorrect address could make your credit rates quite high.
Incorrect name — Like having an incorrect address, an incorrect name can also cause confusion, and your credit file may pick up the history of a person who has a similar name.
To fix these errors, you need to dispute your credit file. You can do this by contacting the company that you receive your credit report from. Only that company will be able to fix the mistake in your credit file, but they may need to contact your previous lenders or see proof from you that the details are wrong. For instance, if your address is incorrect, you’ll need to provide proof of address.
By rectifying these mistakes, you should see your credit score improve. Having a good credit score can increase the likelihood of securing loans in the future. But, if you’re still working on your credit score there are lenders who can also help secure a loan for poor credit borrowers.