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Credit reports Q&A

See your questions answered by our money team on all things related to your credit report and credit history

Check your eligibility for credit cards and credit reports, cash coin purse

Do you know your credit score?

There are three main and several smaller credit agencies, you can compare their services with Uswitch.

I live in shared accommodation. Will my housemate's credit rating affect my likelihood of getting a credit card?

The financial situation of your housemates should not affect your own credit rating. Your credit file is a record of your own financial history, and how you have maintained your repayments.

If you are a tenant, rather than a homeowner, the home you are living in should have no relation to your credit file, and neither should the people you live with. Credit checks are made against the individual, not against the household or address. If you see debt collection notices coming through your mailbox to someone you live with you don't need to be concerned that this will negatively impact your own credit score. The only way your housemates or flatmates will influence your credit rating is through an error, or if you fall behind on payments as a result of their actions.

If you move out of the property it is very important that you remove your name and responsibilty from the account when you vacate the property. Failure to do this could mean you have a financial obligation to a property you don't even live in. If none of the continuing housemates are willing to accept the transfer of the obligation into their name(s), simply inform the bill provider you are terminating the account - it is no longer your responsibility once you vacate the property.

Find out more about credit checks with our Credit Check Quiz.

Is it bad to have too many credit cards?

Every time you repay your credit balance you are showing other creditors that you are a reliable person to lend money to. This could help with future applications for larger amounts of credit, such as a mortgage.

While credit cards are a great way to borrow for short periods of time, the greater the number of credit cards you have the greater the risk from fraud.

Also, lenders look at your potential credit as well as your actual debt when deciding whether to lend to you, so having a lot of credit cards might mean they are reluctant to approve your application for even more credit. Plus you have the temptation to take on potentially more debt than you can afford to repay.

Find out more about how to pay off credit card debt.

Could applying for too many credit cards affect my credit rating?

Too many credit searches, particularly in a short space of time, can give the impression of someone who has been a victim of fraud, is desperate for credit, or looking for credit with a poor credit history.

Crucially however it is only credit applications that will affect your credit file. There are a variety of other checks that will involve your credit file that won't impact your credit score, like ID checks and quotes. If you have the option to make a search that doesn’t leave a credit application footprint, this can be helpful if you are still at the stage of comparing your credit options.

Compare credit cards with Uswitch.

I have bad credit, but can I still get credit cards that give me rewards?

There are some cashback cards on the market that are available to people with bad credit, but they do have higher than standard interest rates so you need to be careful how you use them.

You can use your cashback card to get a small reward for repaying in full every month while you work towards rebuilding your credit rating. Only get these cards if you can pay the balance off in full every month as the interest rate is likely to be higher than standard cards.

If you end up building up debt on these types of cards you could wipe out any cashback gains you might have made and risk landing yourself deeper in debt and damaging your credit rating further.

Compare credit cards for bad credit with Uswitch.

Why have I been refused credit?

There are a number of potential reasons for this:

  • If you have missed any payments - this could have made a mark on your credit report and make you look unreliable to a potential lender. This could be anything from a loan or credit card repayment, mobile phone contract, or missing a mortgage payment.

  • You are not registered on your local electoral roll

  • You have financial ties to someone with a bad credit history

  • You have a lot of potential credit – a lender will also take into account how many bank accounts you have and how much debt you currently hold or credit you could use.  

  • You may also be victim of not even having a credit history - good or bad or of identity fraud.

  • Many young people struggle to get their first credit card as lenders do not have a financial history to compare.

There are a variety of reasons why you could have been refused a credit card, making it hard to pinpoint the cause. One could be if you’ve missed any payments as this could have made a mark on your credit report and make you look unreliable to a potential lender.

This could be anything from a loan or credit card repayment, mobile phone contract or missing a mortgage payment.

Other reasons could be if you’re not registered on your local electoral roll or you have financial ties to anyone with a bad credit history. The lender will also take into account how many bank accounts you have and how much debt you currently hold.

  • You may also be victim of not even having a credit history - good or bad.

  • Many young people struggle to get their first credit card as lenders have no evidence of whether they can trust them or not. Find out how to use credit cards wisely with our guide to using your first credit card.

I need a few hundred pounds. Should I get a payday loan or take out a cash advance with my credit card?

Authorised overdrafts are probably the cheapest way to ensure you have access to an emergency fund and are easy to set up. You should approach your main bank provider to whom your salary is paid and request an overdraft facility. They will run a credit check to authorise this. Credit unions are another good alternative. These financial co-operatives are member-run and offer better rates for small loans under £4,000. Payday loan providers charge very high rates of interest and are not advisable. Withdrawing money on a credit card is expensive, with 2-3% fees just for withdrawals, although as a last resort they are still a better option.

To find out more about loans, read our guide to personal loans.

Compare current accounts and see what overdraft facilities are on offer with Uswitch.

Would a personal loan be the best option for me to buy a new car?

There are a number of ways to pay for a new car, including a personal loan, overdraft or using your savings that you have built up in advance. There is also the option to use car finance, which may be offered to you in the showroom.

Whatever option you choose, it is very important to be clear about the interest rates and fees you will need to pay, including any arrangement fees and penalties for paying off the loan early or missing payments. Ask for more information if you are not sure exactly how much you will be paying each month, and overall.

Compare personal loans with Uswitch.

Could there be a mistake on my credit file?

The information on your credit file is not always perfect or up to date, and anything from a divorce to moving house can lead to mistakes being recorded on your credit file. That's why it's always a good idea to check your credit file, particularly before applying for credit.

How can I rebuild my credit score?

To rebuild your score you’ll need to use your credit card regularly, never missing a payment and always staying within the limit.

For tips on how to rebuild your credit rating take a look at our improve credit rating guide.

In the meantime, you can use cashback cards to get a small reward for repaying in full every month while you work towards rebuilding your credit rating. Added extras are also available with these cards to give you a pat on the back for paying your balance off in time.

Another way to improve your own personal credit is to enter into a joint financial commitment such as a loan with someone who has a good credit rating, such as a spouse. Both of you would then be responsible for meeting the obligations of the commitment (like repayments). It is not advisable to enter into an arrangement like this with a housemate unless you are comfortable and confident each of you will be able to make the repayments.

You could either damage someone else's credit rating through no fault of theirs, or they could damage your rating. Neither is ideal for someone you are living with.

Find out how to build your credit score using a credit card.

I've been told that I should get a credit card to improve my credit rating. Is this true and how so?

There are a number of things you can do to improve your credit rating but one of the most basic is simply to show that you can make repayments. This can be as simple as having a mobile phone contract and keeping up your regular payments. Any other regular repayments such as utilities bills will demonstrate you can keep up payments and will improve your credit score.

A credit card can also help in this regard: if you make modest purchases on a credit card and repay the balance in full every month it will improve your credit file over time.

Find out how to build your credit score using a credit card.