Having access to a good range of credit facilities is a fundamental requirement for buying your own dream pad, and credit problems can stop you in your tracks at a critical time. It makes sense to proactively manage your credit file (the reference files used by all the major lenders to check your viability for a loan) so that you can be confident of getting the finance you need, at the best rate possible.

Many people are not even aware that their credit rating, scored out of a thousand by the major agencies, effects the loan percentage rates offered as well as the loan decision in principle, or that it is possible to access this information on a regular basis to make sure it accurately reflects their current status.

The three main credit reference agencies are Callcredit, Equifax and Experian, and the advice below is taken from their own recommendations to subscribers.

• Be somewhere, so your credit can be checked! – It’s vital that you are registered on the Electoral Role for your primary address, so that your details can be found for checking. Your score may be lower if lenders are unable to locate you.
• Court Information – includes judgements made and voluntary arrangements you have agreed, and this info stays on your credit file for 6 years. Potential lenders make little distinction between satisfied and unsatisfied judgements, but it’s still important to challenge anything that is not 100% accurate.
• Number of searches - every time someone searches your credit file, a search “footprint” is left on your report so that you can identify who has been looking at it, why and when. These stay on your file for 6 years, and expire automatically. Too many footprints may have a negative impact, so limit the number of applications you make where possible.
• Credit Accounts - records are kept of your total borrowings (Mortgages, Loans & Credit Cards) and how actively your Credit Cards are used. Surprisingly for some, cards with zero balances and no activity can be viewed as risky by lenders – and it’s useful to make some purchases on each card account you own, and then pay the balance off, to demonstrate that you can use credit facilities wisely.
• Mortgage problems / Fraud warnings - the Council of Mortgage Lenders report on repossessions, and an agency called CIFAS reports on fraud. Either entry on your credit file would mean that further checks are made to verify your identity and viability for lending. Refusal is not automatic, but delays and further referencing could be anticipated in these circumstances. CIFAS entries don’t directly affect your score, but you need to make sure that there are no inaccurate entries on your file.
• Gone away records - failure to keep your existing lenders fully informed of your address movements can have a negative impact on future lending decisions. Make sure you keep everyone up to date with changes.
• Notices of correction - finally, everyone has the right, under the Consumer Credit Act 1974, to add a “Notice of Correction” of no more than 200 words on their own credit file. This enables you to give a clear explanation of any wrong or misleading entries.

We’ve found an excellent resource that will allow you to manage your credit files, with all three leading agencies, easily online. Check out http://www.checkmyfile.com/ , where you can gets tons of free information (including a free credit score), and access to all the data you need to get in full control of your finances.  This IS very important for your future property purchases and borrowing power, so don’t delay!