How to Know your UK Credit Rating?

Very few things carry as much weight as your UK credit rating. Your credit rating is a way for the banks to know how creditworthy you are and what your credit history is.

When you approach a bank for a loan, the parameter considered to decide whether or not you can get the loan is your UK credit rating. If the bank decides to give you the loan, your credit score helps settle its interest rate. Therefore, it is vital to have a good credit score and understand how to maintain a high credit score.

How are UK credit rating made and who maintains them?

In the UK, credit ratings are created by companies known as Credit Rating Agencies (CRA). The job of a CRA is to analyze and assign a score to each individual. This score is used to give banks and other financial intuitions an idea of how creditworthy you are. A UK credit score rates the borrower’s ability to pay back debt by making timely loan repayments as well as determine the likelihood of the borrower defaulting.

The three main CRAs have different methods of developing their UK credit ratings, and each of them also has a different scale for comparison. However, the idea is the same; the higher your credit scores, the better.

What is in your UK credit report, and why is it essential to have a good score?

Each CRA in the UK has a file on your entire credit history. This file is known as a credit report. The information held in a credit report typically is:

  • A ledger of all your accounts: This list contains bank and credit card details. If you have taken any prior loans, the details of your payment habits are listed in this ledger. If you have missed any payment deadlines or defaulted any loans, these details will stay on your credit report for a minimum of six years.
  • Your name and date of birth: CRAs have these details from the time you opened your first account.
  • Your place of residence: A place of residence is an important detail to keep up to date. Having a fixed location of residence reflects positively on your credit report.
  • People who are financially dependent on your account and their past history: Married couples usually have inter-connected accounts. There are several reasons for having joint accounts, such as mutual credit, etc.
  • Details of your current bank account holder: However, this information is only linked to overdrafts.

It is vital to have a good UK credit rating seeing how a good credit score is directly related to a low-interest rate loan from banks.

How do UK Credit Ratings affect your Interest Rate?

While applying for a loan or a mortgage, a credit score can save you thousands of pounds in interest over several years. It is essential to you keep your credit score up by maintaining a good credit history.

A higher credit score allows the bank to have more confidence in you as a borrower. Due to the right credit score, banks are more likely to give you larger sums of money as a loan at a lower rate of interest or let you borrow money on no interest.

If you have a poor UK credit rating, the bank is likely to lend you smaller loans at a higher interest rate.

When should you check your UK credit rating and credit report?

Checking your credit report is especially important when you are applying for a new loan, looking to buy a new car or in search of a new credit card. It also is recommended that you check your credit rating and credit report from time to time. This is needed to ensure there are no mistakes or that you haven’t been wrongly charged.

Why is it important for you to check your UK credit rating and report?

There are three CRAs tasked with making their own credit reports and UK credit ratings. They create these reports independently, and they get all the information for their reports from the lenders from whom you borrow. This information culminates in your credit report as well as your UK credit rating. Therefore, it is crucial to check and update this information, especially if:

  • You have changed your place of residence, and it has not been updated on the old accounts
  • Banks have wrongly placed a default against your name
  • You no longer have a joint bank account with someone
  • Have old credit cards that you no longer use
  • Have been rejected for a loan

How to check your UK credit rating and your Credit Report?

When it comes to creating a credit report, there are three leading agencies in the UK. Experian, Equifax and TransUnion are the three CRAs that lenders will use before granting you a loan.

All CRAs are required by law to give you a copy of your credit report and your UK credit rating for free. This report can be accessed online or though older, offline methods such as writing by mail. However, a more convenient way is by applying online. CRAs usually provide an online form which you can use to apply.

If you opt to apply for your credit report by writing, there are a few things that have to be specified. Your letter must include:

  • Your Full Name
  • Other names that you may have had in the past 6 years
  • Your full residential address, including the Pincode
  • Other places of residence that you may have held in the past 6 years
  • Your date of birth

Once they get the mail from you, the Credit Rating Agency is obligated to send its report within one month. Sometimes, CRAs might need proof of the information that you have submitted in the form. For example, evidence of name and address can be given through a previous utility statement or bank statement.


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