Whether you or your partner took care of your finances or both of you in equal measure. It's a good time to take stock. A key factor in this is your credit rating. We explain what it is, and how you can check and improve it.
How does it work?
When you apply for credit with a company, it will (with your consent) check your credit score through a credit reference agency. The three main ones are Experian and Equifax. These companies hold your credit report, which shows how you have repaid credit in the past and lenders take it as an indication of how you will repay credit in the future.
A poor credit history needs to be fixed
A poor credit history will limit your choice and usually means you’ll have to borrow at higher rates. If your finances are linked to your ex-partner (e.g. joint accounts), this may be affecting your credit rating in a negative way.
Therefore, if you have split up with someone you have joint finances with; it may help your credit rating if you separate your accounts as soon as possible and you can also write to the credit reference agencies and ask for a notice of 'disassociation'.
It’s a good idea to check your credit report to know your score, find out the areas you can improve on and also check for any errors and get them changed. You may be able to obtain a copy of your credit report for free from Experian Credit Expert, click here for more information.
If your credit rating is poor, here are three easy steps you can take to improve it over time:
Register on the electoral roll
To register on the electoral roll you will generally need to complete a voter registration form and return it to your local authority. It is vital you do this every time you move house.
Stop applying for credit that you won’t get
Every time you apply for credit the ensuing credit search is noted on your credit report. If you have applied and been rejected several times, your credit history may be getting worse.
Open a higher interest credit card
You are more likely to be accepted for one of these if you have a poor credit rating. Make sure you manage it properly through repaying every month in full, spending a little each month for six to twelve months. This is a very high risk strategy and often not a good idea. The monthly repayments can be extremely high so be very careful.