We all have a credit record and it will show our financial history. That credit record can be looked at by other people and this is why some people will want to try to improve it.
Who Looks at my Credit Score?
It is important to be aware of who looks at your credit record first. You will find that when you apply for a financial product, particularly a loan, then you credit record will be looked at. The company will want to check to see whether they feel that you can be trusted. These companies will be companies such as lenders, insurers and possibly utility companies as well. They will look at your credit record and they will have a way to decide if they feel they are happy to trust you. You will also find that potential landlords will look at it as they will want to know if they can trust you to pay your rent. Some employers may even check it as well. You can look at it too.
When someone looks at your credit record to check to see if they are happy for you to be their customer, this will leave a trace. In other words it will show that they have been looking. This can be fine in some circumstances, for example if you have gone to a comparison website for an insurance quote each insurer will show. However, if you have applied for lots of loans, then this will not look so good. It will look like you are desperate to get some money and have therefore applied to as many companies as possible to get it. This will be frowned upon by others and they will be less likely to lend to you.
Will Improving it make a Difference?
You can make quite a big difference in some circumstances if you improve it. This is because you will be more likely to be able to borrow money, get a home or things like this. Lenders will want to see evidence that you are able to repay loans and so having a loan that you have repaid will help as will making regular repayments, such as for utility bills. You will also need to think about the fact that potential landlords will look at it and so it may make the difference between you getting a home or not. You may even find that you will not be able to get such a good utility deal and may even have to go on a prepayment meter, which is more expensive, if you do not have a good credit record.
You can therefore see, that it could make quite an impact if you work hard to improve your credit record. You will need to think about what areas it might be possible for you to improve. It can be tricky, as everyone has a different idea of what makes a good credit record and there is no standard. However, common sense can help you to do things which are likely to give a good impression. For example, you can make that you always pay everything on time and that will show that you will be able to do that if you took out a loan or needed to pay rent. You can try to repay some loans early, so that you do not have too much outstanding debt. It is also really important to make sure that the details on the credit report are correct as any mistakes could put people off, so make sure that if you get any mistakes corrected.
You may think that it does not matter as you do not need a loan or to move or anything so no one will be doing a credit check. However, you never know when you might need a loan, perhaps if you want to buy a home or remortgage, even change insurer or utility supplier it could make a big difference. So, it is important and it will make a difference even if you only make a few changes.