Answer: Your credit rating is your financial fingerprint: a history of any credit you ever took out and how you repaid it that is used by credit providers to gauge how reliable you are.
After all, when your financial provider is giving you a credit card they're handing you the keys to a lot of money, and therefore they need to be sure you can repay it.
However, the facts on your credit file aren't always perfect, 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 you credit file, particularly before applying for credit. But are there any repercussions from applying to often?
Just like every other financial move you make, checking your credit file is recorded. Since your credit file is checked every time you apply for a credit card that means every credit card application leaves a footprint on your credit file. But is that a bad thing?
In short, it can be. 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.
Although being aware of the potential impact on your credit file is one thing, you may still find yourself in the position where you're making multiple credit checks while hunting for a credit card or loan.
If that’s the case you should first of all make sure your credit file is in order. You can obtain a statutory copy of your credit report for £2 (or a free 30-day trial) from each of the three main credit reference agencies: Experian, Equifax and Callcredit.
Make sure all the information on each of the reports is in order before you apply for credit to avoid being rejected and forcing you into multiple applications.