Moneysupermarket.com Group : Keep your credit profile in tip top condition in 2012

• MoneySupermarket.com provides advice to consumers applying for credit in 2012

Britain's number one comparison site, MoneySupermarket.com urges borrowers to take time to understand their credit file and offers a number of steps for Brits applying for credit, to maximise their chances of being accepted.

Tim Moss, head of loans and debt at MoneySupermarket.com, said: "With millions expected to apply for a personal loan or credit card in 2012, it is vitally important people understand their credit file before applying to avoid rejection or being offered higher rates than expected. Each lender applies their own criteria when processing an application, and it is almost impossible to second guess when applying.  Consumers need to be savvy and understand what they can do to minimise the risk of being rejected.

"If you know your credit score is less than perfect, or you don't have much of a credit history, there are steps you can take to improve your rating and increase your chances of getting a loan.

"Doing a little bit of research and using MoneySupermarket's SmartSearch tool, which matches borrowers with suitable credit card products without leaving a mark on your credit file, can make all the difference between being accepted or rejected from receiving a loan or credit card in 2012."

MoneySupermarket.com offers the following tips to improve your chances of being accepted for credit:

1. Check your credit report for any errors
The information held on your credit file will be crucial in determining whether or not your application is successful. It's important to understand your credit profile and to check your information is correct. MoneySupermarket has linked up with Noddle, a free credit reporting service from Call Credit, to offer SmartSearch customers the facility to sign up for a monthly credit report at no cost. As with all credit reporting services if you find an error, contact the credit reference agency immediately and ask for it to be corrected, as even minor inaccuracies could count against you when a lender uses your credit report to make a lending decision. It is worth checking your credit file with all three credit reference agencies, Experian, Equifax and Call Credit as information can vary. Statutory credit reports can be purchased for just £2.

2. Pay on time, every time
Paying bills on time shows a lender that you are able to manage your finances effectively, even if it's just the minimum amount. Avoid missing or late payments as these can leave a black mark on your credit score. If you think you're unable to make a payment, contact your lender as soon as possible. Paying by direct debit or standing order safeguards as it ensures you will never be late making a payment and lenders like it as they know they will receive money from you every month.

3. Close unused cards
Financial companies are paying more attention to the total amount of credit available to individuals, rather than just focusing on the amount they owe. It is therefore important to close down any accounts you no longer use.

4. Stick to your limit
Stay below your credit limit as maxing out your card can be taken as a sign of financial stress. Not skating too close to the edge also eliminates the chance of you being charged for exceeding your limit and losing any introductory offers you might be on.

5. Register to vote
Make sure you're registered on the Electoral Roll at your current address, or your application will be declined - even if your credit record is clean. Many companies use the Electoral Roll to combat identity fraud so it is vital you are registered to be considered as a safe bet. Speak to your local council or sign up online.

6. Be credit active
Proving you can be responsible managing credit is essential. Providers will assess potential customers on their previous behaviour and will look for signs that you are capable of repaying money, which can be frustrating for those without a credit history to secure credit. While you don't want to access too much, the trick is to build up your history slowly. It is worth considering opening an account to establish credit history - even if you pay it off in full each month. Ensure you have a bank account and pay your bills on time as this will help to show that you can manage your finances and are a good candidate for credit. If you use a mobile phone then having it on contract and paying it in full and on time with a direct debit to prevent missing a payment can have a positive impact on your credit profile.

7. Stay honest and take action
Always complete applications for credit accurately and honestly, lenders will be able to discover lies or half-truths easily and decline your application. If your circumstances have changed- such as redundancy or a divorce, then it's important to say so rather than struggling to keep up credit payments in silence. You can place a Notice of Correction on your credit file explaining the background to any arrears. It is never too late to get back on track, clean up your act and get up to date with payments. Providers may also look favourably on those who can pay off loans agreements ahead of schedule

8. Aim for the right targets
Avoid applying to deals you are unlikely to get rather than a scattergun approach when applying for credit. Rejected applications to several lenders within a short period will show up on your credit profile and may damage your credit prospects. It's a good idea to do a bit of research first.

9. Show you are stable and secure
Moving home or switching jobs can impact on the chances of successfully applying for credit. Lenders want to know that you are 'stable and secure' so if you have moved a lot, this could have a negative impact as lenders may see you as a greater risk than someone who has been at the same address or job for a period of time.

10. Search Smart
MoneySupermarket has a SmartSearch credit profiling tool to help those looking for the best credit card deals for their circumstances. Anyone identified as high risk will be guided towards a set of products that offer them the greatest chance of being accepted.

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