5 reasons why your credit score may surprise you

Understand how your credit score works and how the information on your credit report can affect whether you get the credit you have applied for.

• 1. You haven't borrowed enough!
• 2. You don't fit the profile for that particular lender or type of credit
• 3. There are too many recent searches on your credit report
• 4. You had credit problems in the past
• 5. You aren't registered to vote

1. You haven't borrowed enough!

You'd think lenders would love a customer with no debts - but it isn't as simple as that. They rely on the details in your credit report to show them that you make repayments on time and are a reliable person. If you have no track record, they cannot tell how you might behave in future and could mark you down because they have no evidence of you being someone who manages credit well.

Make sure that the lender has full information about your situation - for example, that you own your home and have paid off your mortgage, or that you use a debit card because you live within your means.

2. You don't fit the profile for that particular lender or type of credit

Confusingly, you don't have a single credit score. Different lenders use different ways to work out their scores and sometimes one lender will even use different calculations for different products. They target specific groups of people and you may not fit their template.

Ideally, you should do your research before you apply and identify lenders who want to deal with people like you - for example, home owners, students, older people and so on.

3. There are too many recent searches on your credit report

Each time you apply for credit, you give permission for the lender to search - look at the information on - your credit report. If you apply to multiple lenders in a short space of time, your credit report may give the impression that you are taking on more credit than you can afford.

Make sure that when you approach lenders you always explain that you want details, or a quote, but that you haven't yet decided to apply.

4. You had credit problems in the past

Today, you're financially fit - but perhaps things havent always been so good. If you missed credit repayments in the past, a record of these arrears can stay on your credit report for up to 36 months. With a court judgment, the evidence is there for six years. Information about a bankruptcy stays on record for at least six years and a bankruptcy restrictions order can remain there for as long as 15 years..

Don't panic - you may be able to take remedial action. You can ask to add an explanation to your credit report of the circumstances surrounding any problems that caused adverse information to be added.

5. You aren't registered to vote

Lenders use local electoral registers to check that you are who you say you are and live where you say you live. If they don't find your name at your address, they may need to make further checks or can even turn you down.

The solution is simple: register at once and ensure that you have been taken off the electoral roll at any previous addresses.

View your credit report for free with CreditExpert from Experian

21 February 2008 © Moneyextra.com

Our senior editor Robin Amlôt recommends you should consider taking independent financial advice before acting on any article. Please contact us for help with your individual circumstances if any assistance is required.