Not only can bad debt add to a bad credit rating, but so can being rejected for a loan. Neil Munroe of Equifax is urging people to check their record first.
“Every time you apply for any kind of credit the lender will search your records. You’ll also be marked down for a large number of searches,” said Mr Munroe to This is Money.
‘It used to be only large loans that were recorded. Now all kinds of credit, including your mobile phone payments, count too.”
The warning comes as Moneyfacts recently published a report highlighting the number of people who are rejected for loans or offered higher rates than advertised as “typical”, usually because of their credit rating.
Through obtaining a report for as little as £2 from agencies such as Equifax, Experian and CallCredit, consumers can increase their chances of getting a loan that suits them.
If you want to find out more about maintaining your credit rating, click here for ClearDebt’s useful credit rating guide.