When was the last time you checked your credit report? If you can’t remember or your last check was when you were about to apply for credit like a loan or credit card, you’re actually doing better than the 15 million people in the UK that have never checked their history.
Although most of us are aware that a good credit history is needed to be accepted for borrowing, there is some confusion around the world of credit– so to make it easier to understand, we’re going to take you through a few things that could be holding your credit history back.
‘I’ve never borrowed before’
You may think that if you’ve never borrowed before, you’d be the perfect candidate for a credit application but this is not necessarily the case. If a lender has no proof that you’re in control of your finances and can keep up with regular payments, they could be less likely to lend to you.
The best thing to do if you’ve never taken out any sort of credit before is to try to build it up slowly. There’s no point rushing and borrowing more than you can handle as if you have any difficultly repaying this, it will only damage your credit history – it’s best to start off small.
Opening and managing an account responsibly either from a bank, building society or alternative provider can help to build your credit history. Just bear in mind that as some current accounts require credit checks, you may find it hard to be accepted if you’ve had problems borrowing in the past unless you opt for an alternative.
Not paying off credit card balance in full
Although it’s always advisable to make the minimum payments at the very least, if you can afford to pay off your credit card balance in full every month, this could help towards improving your credit history. When you miss a payment or go over your credit limit, this could contribute towards a bad credit history.
Having lots of credit accounts open
If you’ve got a large amount of credit at your disposal, it can actually make you appear less attractive to lenders. This is because lenders aren’t willing to lend you more than you can afford to repay, so if you’ve got a lot of credit to your name already then you may be less likely to keep on top of this.
Where possible, it’s best to try and limit the amount of credit that you use or have access to. If you’re not sure how much credit you currently have to your name, you can log in and view your credit report through one of the credit reference agencies Experian, Equifax or CallCredit.
thinkmoney Personal Account
Not had the best credit history in the past? You could consider the thinkmoney Personal Account if you’re struggling to find a bank account. The account is a practical alternative to a basic bank account and as we don’t run credit checks on our applicants, this is not something you’ll have to worry about – even if you’ve been rejected from other providers in the past.
The thinkmoney Personal Account is a budgeting account and helps you to manage your finances by separating the money that you need for your regular bills from your everyday spends. There is a monthly management fee for the account – £17.50 for a single account or £24.50 for a joint account.
You can read more about the thinkmoney Personal Account and its features here.