With Christmas around the corner and the reality of gift-buying coming with a bigger bill each year, many of us are turning to credit.
However, not everyone has a good credit rating enough to warrant a lender allowing you to get credit.
For some, knowing and maintaining their credit rating is fundamental to not only gifts at Christmas but throughout the year. On the other hand, some people are unsure of how to.
Simply put, your credit rating is a number generated by credit reference agencies to give you an idea of your chances of being accepted by lenders.
Your rating is based on how responsibly you have used your existing credit facilities. Bear in mind that each credit reference agency uses a slightly different scale. Nevertheless, with each one, the higher your rating, the higher your chances of getting the best credit deals.
However, a good credit rating is no guarantee that your application will be successful. That is because each lender has its own system in place to decide whether or not to accept you as a customer.
You have a legal right to access your credit report for £2 from a credit reference agency. This provides a snapshot of your credit history, but no rating.
To see your rating, you can sign up to a free trial of a subscription service such as Experian. Callcredit also gives free access to your credit report and rating via its Noddle service.
Fortunately, there are plenty of ways to improve your credit rating. These include: registering to vote, keeping your credit usage low and not applying for credit too regularly.
Photo Credit: CafeCredit.com