Using a Credit Checker to Keep your Finances in Balance

Sep 28

Using a Credit Checker to Keep your Finances in Balance

For most people, a big part of keeping the household finances in balance is managing credit and debt.  The use of standard credit products, like credit cards and loans, makes many aspects of life a bit easier, allowing us to borrow to buy essentials like a new washing machine, or earn cash back when doing the grocery shopping on credit cards.  Balance transfer deals on credit cards can also allow you to manage debt cost effectively, by moving expensive debts onto products with a cheaper interest rate.

While using these kinds of credit products can be regarded as optional, there are other credit accounts – like mortgages, or domestic fuel and gas supply – that fall more into the category of essentials.  Using the credit checker service provided by experian.co.uk can make sure that you are able to access the best deals, with the most competitive interest rates, on the market – but why?

The credit checker service basically allows access to your credit report.  Your credit report contains details of your personal credit history, holding information on the different credit accounts that you have opened over the years.  It is lenders who provide this information to the credit reference agencies, who simply compile this data to make a credit report that covers all the credit accounts opened in your name (or practically all of them, as there are still a few lenders out there who do not share information through credit reference agencies).  When you apply for a new credit account, lenders then pay to access your credit report so that they can feed the information held there into a credit scoring procedure.  Credit scoring produces a credit rating for your application, which can determine whether or not it is successful, and also what kind of interest rate you will be offered.

The credit checker service provides your Experian Credit Score.  This is an estimated rating, based on the information on your credit report, and how it might be scored by the average lender.  The reason that it is an estimate is that every different credit provider uses their own credit scoring systems, each of which is designed to identify the target customers for the products that they offer.  Some, like ‘bad credit’ credit cards, for example, are obviously aimed at a different type of customer to the ‘premium’ cards on the market, and so the credit scoring procedures will most likely be different for each product, even if they are offered by the same provider.

However, a low Experian Credit Score is an indicator that you have some issues on your credit report which are likely to have a negative impact on credit scoring.  Looking at your credit report in detail can help you identify and address these issues.

Errors on your report can be corrected.  Routine tasks that you have forgotten to address, like making sure that you are on the correct electoral register, can be easily spotted.  At the more sinister end of the scale, you will also be able to spot any accounts that have been opened in your name as the result of identity fraud.  Fraudulent cards that have been maxed out will obviously have a negative impact on future credit scoring, but thankfully there is plenty of help available from both the credit reference agencies and the government to sort out such a mess.  For more information on identity fraud, try looking here:http://www.direct.gov.uk/en/CrimeJusticeAndTheLaw/Typesofcrime/DG_174616.