Each of us has a credit record. It is used by various financial companies to check before they lend us money, give us insurance or even by potential landlords to see whether we look reliable enough to pay rent. This means that it is important that we have a good record if we want to be able to get financial products and possibly have a home. Each company will have slightly different criteria on what they look at in order to decide whether they see you as a risk or not. Your record will have note of all of your loans, regular bill payments, rent or mortgage and things like that.
There are things which can make your credit record look good and things which make it look bad. Therefore you need to make sure that you have lots of positives and not many negatives. It might be useful to look at your credit record to see what it looks like and you can do this for free without it showing up on the record. Check that it is all correct and think about whether you feel it needs improving. Depending on the company that you use it will tell you the likelihood of you getting approved for loans etc and you will be able to decide whether you want to do anything to change it or not.
If you have never had any bills in your name and never rented or owned a property or borrowed any money, then there will be no record of how much of a risk you are. This means that it is likely that you will be considered to be a high risk and maybe will struggle to borrow money or whatever. Some people therefore think that they should get a credit card so that they can show they can pay it back. This could be a sensible idea if you pay back the full balance each month. However, it may even be hard for you to get a card and if you do, you could end up with a very high interest one and so if you do miss a repayment it will be really expensive for you. Therefore think very carefully about this. It could also have a detrimental impact on your credit record as a credit card may imply that you are struggling to manage to pay for things. It can be better to be named on a bill of some sort. This could be a mobile phone bill, for example and as long as it is always paid then it will help you. You could also consider being jointly named on bills that are always paid on time in the place where you are staying.
If you are in the situation where you have a poor credit score due to debt, then this could be harder to sort out. You will need to prove that you can be trusted to pay everything off on time and that you can afford repayments. This means that you will need to keep paying everything on time. It could also be wise to pay some of your debts. This will show up on your record and will work in your favour as it will show that you can be responsible.
There are a few things that you can do little about though. Banks may look at you as a prospective customer and think about what type of borrowing you may want in the future. They want to make money from you so may not accept you if they think you will not borrow. If you always pay off your credit card in full, credit card companies may not take you on as you will not make them any money.
So although there are some things that you can do to improve your credit record, those that use them to judge you have different criteria and so it can be tricky to know what to do for the best. It can be worth checking and making sure the details are all correct and make sure that you have no missed payments. Have your name on some bills and things to make sure that there is some information about you for anyone looking to see.