Check and improve your credit rating
4 MIN READ
Your credit rating helps decide whether you get approved for a wide range of credit including mortgages, loans and credit cards.
So it’s important to check your credit rating to find out whether it is ‘good’ or ‘bad’.
In other words, if you have a history of missing payments or not paying back credit in full.
And if it’s ‘bad’ then it’s a good idea to improve your rating where possible.
When should you check your credit rating?
You might want to check your credit rating if you’re about to apply for a mortgage, for example, and are worried about credit card payments you missed when you were younger.
You might also want to check it if you are reviewing your personal finances to get them on track and want to know that the information on your record is accurate.
And you might just want to check your credit rating out of curiosity.
The good news is that you have a right to know what credit information is held on you (more about that, below) and to ask for it to be changed if there’s a genuine mistake on your record.
How credit ratings are used
Anyone who provides you with credit – banks, credit card companies, moneylenders etc – can request a credit report on you to see if you have a good track record of paying back money in the past or not.
You may also have your credit rating checked when you apply to get things like a mobile phone contract, car insurance or energy from a new supplier to lower your fuel costs.
A good credit rating can make a difference by reassuring creditors that you are likely to pay back money.
But they can only ask to see your credit report if you apply for credit from them.
What do we mean by credit?
Credit doesn’t just mean mortgages, loans and credit cards.
It can also include bank overdrafts, credit union loans, and local authority loans to buy or build a home.
It can include hire purchase agreements that spread your payments over 12 months when you buy things like washing machines, sofas and TVs.
And PCPs (Personal Contract Plans) if you use one to buy a new or used car.
Where can I see my credit history?
In Ireland, there are two organisations that hold credit information about you and provide credit reports to companies if you apply for credit from them.
They also have information about any credit you’ve taken out, how much it was for and how much you’ve paid back.
And whether you missed any payments or didn’t repay the credit in full.
For example, if you apply for a mortgage, the mortgage lender can approach to either credit ratings agency to get a report on your credit history and can see if you missed car loan repayments or failed to repay a personal loan in full in the last 5 years.
What’s on my credit report?
Credit reports may include:
- Your name, date of birth, address
- Names of lenders and loans active in the past 5 years
- The types of loans – mortgage, credit card, loan etc.
- How much the loan was for and how much you’ve paid off
- Whether you missed any repayments
- If you did not pay off the loan in full or on time.
What is a credit score?
You may also have heard of credit scores and wonder how they relate to credit ratings.
One of the two agencies, the Irish Credit Bureau*, takes into account all the information on your credit report and boils it down into a single credit score.
The highest score you can get, 581, means that you are one of the lowest risks to lenders and you are highly likely to repay on time.
The lowest score you can get, 224, means that you are one of the highest risks to creditors and you are highly likely to not repay credit on time.
You can find out more on their website* (scroll down to the bottom to find the section on credit scores).
How can I improve my credit rating and credit score?
If you have missed repayments in the past, the best way to improve your rating is to pay any existing credit back on time and in full.
According to the Irish Credit Bureau*, ‘proper debt level management’ and avoiding ‘excessive applications for credit’ are other ways you can improve your rating.
In other words, borrow what you can afford to repay and demonstrate that you can repay on time and in full.
At the same time, don’t apply for every credit product.
Credit providers cannot see if you have been turned down for a loan, for example, but they can see the lenders you applied to and may draw their own conclusions if you do not currently have a loan with those lenders.
Remember that the agencies can only keep details of your credit for a maximum of 5 years after the credit stops being active (meaning it was either paid off or you came to an arrangement with your creditor).
So a loan payment missed, for example, will no longer appear on your report if your loan ended over 5 years ago.
Where do they get information about me?
Banks, credit unions, credit card providers, moneylenders, local authorities, hire purchase and personal contract plan providers and finance houses are required by law to send the information to credit ratings agencies.
They provide details of customers who have taken out mortgages, car loans, personal loans, leasing agreements and credit cards etc. with them.
When you apply for credit from them, they can ask for a credit report about you.
It’s worth emphasising that ratings agencies are only obliged to provide lenders with this information if you are applying for credit or are having existing credit restructured.
Credit rating agencies don’t make credit decisions, lenders do
They just hold credit information and provide reports.
Your lender makes those decisions based, partly, on the report they receive.
But they will also base it on other information.
What you put on your application form, for example, including your salary, the type of job you have, where you live and a range of other info including whether you have applied to them before.
How can I check my credit rating?
You can get a copy of everything that the Irish Credit Bureau and Central Credit Register have on your credit record.
The good news is that it’s free (subject to fair usage) to check your credit rating.
Who else can see my credit details?
No-one other than a lender you have applied to for credit can see your credit report without your say-so.
Not your husband or wife, nor any other relative. Not your landlord nor your employer.
(You might want to read these tips on how to chat about money with your partner).
And remember that a lender can only request your credit report if and when you apply for a loan from them.
I’ve spotted a mistake on my credit report, what can I do?
If you think you’ve spotted a genuine error, you can ask to have it put right.
The Irish Credit Bureau suggest you contact the lender involved first and request that they change the data about the loan that you think is wrong.
The Central Credit Register process for applying to change information on a report is described in this fact sheet*.
What isn’t on my credit report?
Only credit products appear on your credit report.
So, for example, credit reference agencies do not show your savings accounts, pensions or investments as they are not credit.
Find out more
Click here to find out more about Bank of Ireland mortgages.
Click here if you want to know more about Bank of Ireland loans.
And click here to learn more about Bank of Ireland’s range of credit cards.
*Clicking on this link brings you to a third-party website. Bank of Ireland is not responsible for content on this website.