Credit Report compared...

An increasing amount of consumers are doing more damage than good to their credit rating with lenders because they are continually enquiring about different credit services with finance companies.

Even though there is not one universal credit score for each consumer in Britain, most lenders in Britain do determine a credit rating based on past behaviour and previous transactions that they have access to about your finances in a database of information. An individual can find out their rating through an free credit report.

Some consumers are getting desperate and are trying to get the best deals around to consolidate their debts, with one of the principle examples of this being borrowers who try to get the best credit cards for people with bad credit for 0% balance transfers in the hope of having a longer amount of time to pay off an outstanding debt without interest.

Most of these are consumers with bad credit ratings because they have failed to consistently keep up with credit card payments. This lack of consistency has resulted in arrears in some circumstances which in turn results in a bad reputation with some lenders.

Little do consumers know that the activity that takes place with lenders is shared with other financial companies. This means that most lenders have the opportunity to check on past transactions to see if the client could be profitable to them or not.

The problem comes with credit rejection. As consumers with bad credit get their applications for credit rejected, notes are added to their credit file which lists all failed credit attempts and further devalues the consumer’s credit score.

Consumers are being urged to think more about the circumstances that surround their rejection. They are also being urged by self-styled ‘money saving expert’ Martin Lewis to check their credit rating if they believe they have been wrongfully declined credit.

He said: "You apply and get rejected due to an error, then you try elsewhere and the same happens. Eventually, you check the file, get the error corrected, and apply again, yet now you're rejected because of all the applications. So it makes sense to always immediately check your file whenever you're rejected."

As more consumers get bad credit because of the inability to keep up with repayments and lenders tighten their protocols, more and more people are falling into the rejection spiral. Now, consumers are being urged to take the initiative to get out of it before they make the situation a lot worse for themselves and their credit rating amongst lenders.