There are a number of things that can affect your credit rating. Debt is one of them, if you fall into arrears, default on a debt or your debt leads to legal action such as a CCJ, for example.
If you would like to check your credit report, it’s possible to access it for £2, or you can register with a credit reference agency (Experian, Equifax or Callcredit) online for free. You will need to provide some personal and financial information to register. If
you do not cancel your subscription after (typically) 30 days, you will be charged a monthly fee.
However, a new website called ‘Noddle’ is being launched later this year by Callcredit, which will allow anyone free and online access to their credit report.
Your credit report should show you what a financial service provider could use to help them decide whether to approve your application. For example, bank account providers often run a credit check when you apply to open a bank account.
If you would like to apply for a new bank account, but you have found problems on your credit report that could make it difficult, you could apply for a bank account without a credit check, such as a basic bank account.
Basic bank accounts may not have the best interest rates and there’s usually no overdraft facility. However, there are still some advantages:
- You may get a cash card or even a debit card.
- You can make Direct Debit payments which can get you discounted energy
- It can be much easier to budget when you have statements and balance updates
- at your fingertips.
Incidentally, it may not be a bad idea to live without an overdraft, for a while anyway, especially if you already have other debts. Having no overdraft means you know you’re not borrowing more when you use your cash card.
A basic bank account that doesn’t require a credit check could help you to get another account with more benefits later on, especially if you show you can manage your money well – so you may be able to build on or improve your credit rating while you
have an account like this.