What’s your credit file like?

If I’m honest I not really looking for some magical credit score number. I know enough about how it works to know that the score given can fluctuate based on small changes. So why do I check religiously? Because by nature I’m the sort of person who wants to know all the facts.

So just knowing that my credit file is “out there” I simply cannot help but check what’s recorded and to make sure it’s absolutely correct and accurate. That’s my first priority. Over the years there has been very little I’ve needed to correct on my file but I have known people who have discovered that their identity had been used thousands of miles away just by checking their credit file. It’s worth checking every once in a while even if not as regularly as I do.

Once I make sure it’s all correct information my next task is to check if there’s anything having an adverse effect. This could be late or missed bill payments, defaulted accounts, using a high percentage of available credit, lots of credit applications and the list goes on.

Websites such as ClearScore make this easier nowadays by listing all the things having a negative effect on the credit file. My method is to work through the list, one item at a time, to determine whether I can take any actions to minimise the effects – setting up direct debits to avoid late payments for example. Some things you just have to let time take their course with. The older a negative action is the less effect it has and after 6 years it leaves your file completely.

Most of the tricks I’ve used in the past to improve my credit file involve credit cards. Initially, when my credit file was abysmal (in my early 20s) I managed to get a credit builder credit card. The limit was only £200 but it was a start. I used it every month and paid the balance off in full each time. This started to build a picture of me as a reliable customer. Gradually the credit limit was raised but the interest rate was still high – I think it was about 34% APR. Having built up a record of being a sensible credit card user I was able to apply for a card with a lower rate. I didn’t cancel my original credit card though. By having two cards it actually meant that the percentage being used was far lower than previously. Where in the past I might used £100 of my £1000 limit (10%) it was now £100 of a £3000 limit (both cards combined) and this amounted to 3.3%. A significant improvement. This relied on self-control and not using the cards just for the sake of it.

I know some people avoid credit cards like the plague but for me they are a useful tool and more than just a “flexible friend” – yes that’s shows my age but hey, if you know then you know (if you don’t then google the old Access Card advert) 😁

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