Don’t let your credit rating slide into the New Year

Posted in 'Credit Score' by Richard Catlin

25 November 2010

It may come as a surprise to some people to find out that during November, their credit rating is at its highest.

Credit scores can change very quickly and your rating could take a significant hit in the New Year unless you take steps to protect it.

You should by now have returned your completed annual Electoral Roll form to your local council, which would have sold the data to the UK’s three credit reference agencies. The information will be uploaded by the credit reference agencies onto credit files later next month, and it is this version that will be used whenever anyone looks at your credit file over the next 12 months.

Because each of the agencies update their records separately, it’s vital to check that you’ve been included at your current (and correct) address with all three, as it can make the difference between being accepted and rejected when you next apply for credit.

With most people increasing the amount they spend over the festive season, late payments in January and February are also a key factor in credit ratings taking a nosedive after Christmas.

Research suggests that here are still around 2.3 million people in the UK who are still paying for Christmas 2009 – although that does represent a significant reduction on the 4.5 million people who were in the same position three years ago and still paying for Christmas 2006.

There are some great deals around at the moment to help spread the cost of Christmas – but time is fast running out to get a card in time. The Virgin Money credit card is currently offering 0% on balance transfers for 16 months (a 2.89% fee applies) as well as 0% on purchases for 3 months – allowing you to spread the cost of this year’s celebrations as well as any balance you might already have on an existing card.

It’s important to set up a direct debit as soon as you have the card. This will act as a backstop to prevent late payments appearing on your credit file.

The cheapest way to check your credit report regularly – allowing you to see what your rating is like today as well as verifying that you’ve been included on the electoral roll in 2011 – is by signing up to a free 30 day trial of our Multi Agency Credit Report Monitoring. It's free for 30 days and then costs just £9.99 a month - the best value service in the UK, giving you access to data from all three UK credit reference agencies. Your credit score is included at no extra charge, allowing you to see which lenders are most likely to say ‘yes’ if you are thinking of applying for a new card in time for Christmas.

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