Lenders and your credit history
Lenders are quite fussy about what they like to see on your credit report. Most revolving loans, loan accounts and credit cards will show a monthly payment pattern describing your history for up to 6 years, although often only the last 3 years are visible on your credit history. Usually a revolving credit account or credit card account will be shown as a row of numbers, each one representing a single payment month. Often '0' is used to show - on time, '1' is used to show 30 days late, '2' - 60 days late, and so on through to 9, which is generally indicating an account that has been written-off or sent to a collection agency. You should note that different credit reference agencies employ different codes but the agency concerened will normally give you a full explanation of the codes used.

What lenders like to see in your credit file
As an example a well kept credit card should look something like this: 0000000010000121211001000000000000011000000100000 Even though some payments were late the card is generally well kept - lenders don't normally expect perfection so the above example looks pretty good.

Conversely a bad credit card might appear something like this: 0001234110012212341110001231113334456789999999999 Notice that even at the start the card was maintained erratically and unreliably, often falling into arrears. Eventually this lead to the card becoming delinquent and written off. Lenders don't like to see this at all.

Having credit cards and using them regularly and wisely, shows the lender that you are a model borrower. You are likely to be awarded around 50-100 bonus points for every loan or credit card that has been well maintained and/or paid back on time.

For more on how lenders look at your credit file, the Complete UK Credit Repair Guide provides valuable information to help understand how the system works so that you can get credit more easily. For details about the guide please click here