Credit rating is associated with dull things not concerning anyone under the age of 40 right? Wrong. According to a recent survey, over three quarters of young people are at risk of being refused credit, and you need to know this stuff. So we’ve come up with the Go Think Big guide to credit rating. And I’ve tried to make it hilarious. Hey, you’re laughing while also learning (about credit rating)!

“Knock knock!” “Who’s there?” “It’s only bloody credit!” “Credit who?” “Read the below paragraph.”

If you’ve ever had a Burton storecard (or any storecard, it doesn’t have to be specifically Burton. In fact, I don’t think anyone’s shopped at Burton since 2006), a mobile phone contract or borrowed money from the bank – including a student loan or overdraft – then you’ve experienced the giddy world of credit. 

The way you deal with credit and, crucially, have dealt with it in the past really affects what you do in the future. Obv if you bought a scarf from Burton (I’m obsessed with Burton right now) on a storecard and were a day late paying it back, this probably won’t affect your attempts to buy a condo in thirty years time (you’re doing really well thanks to that opportunity you applied for via Go Think Big). However, your credit gets checked when you open a bank account, buy furniture, get a mobile phone contract and buy a new laptop and the best deals are really only open to those with good credit ratings. 

What’s a credit rating? I hear you cry, euphorically.

“Why did the chicken cross the road? Because his laptop was on the other side and he wanted to find out his credit rating was.” 

You probably have a credit rating, which is basically a score that people use to see how responsible you are when it comes to repayments. Like an invisible mum that’s only interested in, y’know, financial reliability. Or a measurement of how attractive you are, for banks.

Experian does a good free rating and, not only is the information set out in a fairly easy-to-understand way, but it searches for your details from the General Register Office before knowing about every transaction you’ve ever made. Which isn’t creepy and terrifying at all. Sarcasm aside, it’s totally secure – just make sure you ring customer services the moment you’ve got your report, and CANCEL THE SUBSCRIPTION. Otherwise you’ll end up not being able to pay the fee and ironically ruining your credit score – haha! Wouldn’t that be hilarious? No. No it would not. 

“Doctor, doctor what affects my credit rating?” “The things detailed below.” “OK, thanks.”

Simply put, if you’ve borrowed stuff, been late on repayments, not paid your rent on time, or had issues with credit cards, this will probably affect your credit rating. Other fun things that affect it include: 

  • You haven’t completed a payment agreement
  • You don’t own a home
  • You’ve opened more than two credit accounts in the last 6 months  
  • You’ve made more than four credit applications in the last 12 months
  • You’re younger than 25 (sorry, guys- but it’s still doable!)
  • You are not on the electoral roll
  • You have missed two or three consecutive payments in the last year

Yep, missing rent even by a few days can affect this. So can not paying bills. So probably make sure you pay everything on time, if you can and, if you can’t, get advice on what to do next from someone who knows their stuff or lovely helpful site Financial Advice.

“How many credit cards does it take to change a lightbulb? And will a good credit rating mean I will never be declined by banks/anyone ever?” 

Well, hopefully. But there are other things that make you less fanciable to the banks. If you’re declined, it could be because you’re self employed and can’t prove you’re regularly getting money or because you’re working part-time or on a low-income job. Which really sucks, sorry about that.

However, it’s worth checking you’ve registered your current address, and making sure you’re on the electoral roll. Both of these can boost your rating and make banks/companies fancy you more and that mum we discussed who’s only interested in financial reliability will be a lot happier to help you out.  

An Englishman, Irishman and a Scotsman walk into a bar. The barman informs them how they can boost their credit rating and their chances of getting credit. Then they go home. 

  • Pay all your bills on time, even a couple of days can make a difference
  • Make sure all your details are correct on your credit record – check it regularly.
  • Try not to use more than 75% of your available credit limit. For example, if you have a credit card limit of £100 (ha), don’t go over £75.
  • If you really do need a credit card, scout around for ones that help credit scores such as Capital One and Aqua Classic. 
  • Only apply for things (say, loans or overdrafts) when you really need them – applying for more than four forms of credit in a year can lower your credit score  
  • Don’t apply for loads of things (say, three storecards, a loan and a mobile contract) as each application can have a negative impact on a credit record.
  • Close all old credit card accounts and cancel old direct debits
  • Try not to take out more than two forms of credit within a six month period 

So now you know all about credit ratings, you can make sure yours is as good as it can be. Of course sometimes we can’t avoid late payments and all that jazz – but at least you know how to bring your score back up again. Or, at the very least, you know what it is. And wasn’t it fun?!