Improving your credit score
Your credit report is a personal history of the financial credit you have had, or applied for, within the last six years. Your credit rating or score, is based on information within this report.
Credit reports are held by credit reference agencies; there are three operating in the UK: Experian, Equifax and Call Credit.
Lenders and companies use credit scores to decide whether to give customers access to their products or services. Having a higher credit score means you may often get better rates for products and services such as gas and electricity, insurance, bank accounts, mobile phones, or personal loans.
Your report will also contain details of people you are, or have been, financially connected to. For example if you have a joint bank account the other person will be seen as a financial associate. Although their credit history doesn’t appear in your credit report, lenders are able to look at the other person’s history, as their circumstances could affect your ability to repay what you borrow.
Here’s a video from Experian with 5 top tips on improving your credit score:
How to check your credit report
You should regularly check your credit report (annually, or before any major application such as applying for a mortgage) to check everything is accurate and up to date and to protect yourself against fraud.
You can do this by requesting to see a copy of your statutory credit report, available from each credit reference agency for a fee of £2.
Your statutory credit report does not tell you your credit score or rating, however each agency offers products to help you monitor your credit score and your financial profile, usually for a monthly fee.
The following websites will take you straight to information on applying for your statutory credit report from each of the three credit reference agencies in the UK. If you have moved in the last 6 years, you will need details of your previous addresses handy when you apply. You can also choose whether you’d like to receive your report online or by post:
How to fix any mistakes
If you do spot any mistakes, you can contact the credit reference agency. You could also speak directly with the lender or company you believe responsible for the incorrect entry. Credit reference agencies rely on information provided by lenders and often the lender is in the best position to resolve this.
The Rental Exchange
One of the ways RentalStep is helping our customers to improve their credit rating is through the Rental Exchange. We believe paying your rent should give you the same benefits as paying a mortgage. That’s why we’re working with Experian, the UK’s largest credit reference agency, to help you use rent payments to build a good credit history.
How does it work?
The scheme involves us sharing your tenancy and rental payment information with Experian on a monthly basis. This will help prove your identity and address, and show a record of paying your rent on time. This could make it easier for you to apply for cheaper credit cards or loans, get better gas and electricity rates, and open or change bank accounts more easily.
Paying your rent on time will help you to access cheaper products and services in the future.
What’s happening now?
Since January 2016, tenants have been sharing rent account information with Experian on a monthly basis and their rent payment history has been building up on their database. It will take some time for Experian to build up the data to be used by lenders and service providers, and for it to show on your credit report. This is because they need to build up enough information to demonstrate a track record for lending decisions.
You will be able to see your rent payment history as part of your Experian credit report later in 2017, either by requesting your Statutory Credit Report or through Credit Expert (see the section above ‘How to check your credit report’). Until then, you won’t see an impact but you can be sure that you have already been building up a good history of rental payments which will soon contribute towards improving your credit score.
How do we protect your information?
Both RentalStep and Experian will make sure that your information is treated in accordance with the Data Protection Act, so you can have peace of mind that it will be kept secure and confidential. It will only be made available to a company or organisation if your tenancy information is relevant and you have given your permission for them to check your TenantPassport, or where it is strictly necessary for them to check information about your tenancy.