Your credit rating is one of the most important things in your life, and not a lot of people are aware of it. You’ll find that lenders use your credit rating to determine whether they should lend you money, the amount of money that you can afford to borrow from and even the level of interest that they should charge you for borrowing money.

When you consider the importance of credit in the current economic climate, having a good credit score is crucial but not enough people are aware of the factors that impact on their credit rating.

The following factors can all have a negative impact on your credit score.

If you have a high level of debt, you’ll find that your credit score will be compromised. This is because companies will reluctant to provide you with more money. A lender is likely to be nervous or concerned about someone with a lot of existing debt being able to pay off any new level of debt.

Missing Payments will Harm your Credit Score

If you have missed payments or been late in making payments in the last six years you will find that your credit score can be harmed. This means if you have made late payments on credit cards, personal loans, mortgages or even your utility bills, you may be harming your chances of obtaining a loan in the future.

You’ll also find that if you have had unpaid bills that have led to you suffering a County Court Judgment, a CCJ, your credit score will be impacted on. In Scotland, a CCJ is known as a decree but whatever it is called, you’ll find that having one on your credit score can cause a great deal of issues.

There is also the fact that if you apply for a lot of credit in a short period of time, it will show up on your credit report and this will set alarm bells ringing with potential lenders. They will see these repeated requests for credit and they will question why a person needs so much money or why they are so desperate for funding.

If you are looking for the best rates, it is best to find a lender that provides a quotation search as opposed to a credit application search. These are different things and lenders will be aware that a quotation search is different from a credit application, and won’t be as harmful to your credit score.

Another thing that can harm your credit score is opening credit accounts and not using them. This is because lenders will focus on the level of credit that is available to a person, not how much credit that a person is using.

Make sure you are listed on the Electoral Register

There is also a lot to be said for being on the electoral register. If you are not on the register, this will harm your credit score because this is something that lenders look at to ensure you are who you claim to be. Similarly, if you move homes a lot you will find that lenders will have a level of doubt about you. If you can stay in one place for a recognisable period of time, lenders will be more confident in you.

You should also bear in mind that just because something is on your credit report doesn’t mean that it is true. Many people have found that their credit report contains mistakes and that these mistakes have actually prevented them from obtaining the finance that they need. This is why you should examine your credit report and make sure that everything is as it should be. If there are mistakes on your credit report, you should flag these issues to ensure that your report is being reviewed and examined the appropriate way.

If you are struggling to improve your credit score, there is a way to obtain finance. You should find that you can obtain finance through a guarantor loan. This is where a guarantor vouches for you and their presence provides the guarantor loan company with the confidence they need to provide you with an affordable rate of APR. This is definitely something to consider if you are concerned about the options you have for loans.

Andrew Reilly is a freelance writer with a focus on news stories and consumer interest articles. He has been writing professionally for 9 years but has been writing for as long as he can care to remember. When Andrew isn’t sat behind a laptop or researching a story, he will be found watching a gig or a game of football.