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Your credit rating is a score that is based on your personal history with money. It’s something that is built up about you without you needing to do anything out of the ordinary, but it’s very important nonetheless. Your credit rating can have an effect on all walks of life, and if you have a good one you could find it far easier to secure loans, services and even jobs, than someone with a poor rating.

Many people come across their credit rating for the first time when they apply for credit with an organisation and the company checks their credit report. In most cases your credit rating accurately represents your financial history.

However, you could be confused by a negative report, especially if you think that your record should be impeccable. If this is the case you may find that you have been the victim of identity theft. This is when someone is able to steal your details and then use them to open fraudulent accounts and loans. If you have suffered from identity theft you may not even find out about it until a credit check like this.

You will have the chance to prove that you have been a victim should this happen, and you will be able to take steps to repair your credit rating. A note can be put on your file to ensure that any creditors looking at it in the future will be appraised of your situation and this can be invaluable for anyone hoping to secure a loan or credit of any kind.

Even if your credit check comes back clear, there’s no reason for ignoring it. Your credit history is constantly evolving and that means that your credit rating is constantly able to change too.

Your credit rating is different to your credit score, your credit score is the score that a potential lender complies using your application for credit along with the information on your credit report. Both are important. Keeping a close eye on your credit rating means that you could discover potential problems before they blossom and make it less likely that a creditor will compile a negative credit score for you.

If you have a good credit history it’s a good idea to preserve it at all costs and if yours is bad due to mistakes in the past, it’s worth doing everything you can to improve it. Your credit rating can have an impact on everything you do, so make sure it accurately represents you.

Adam Singleton writes for a digital marketing agency. This article has been commissioned by a client of said agency. This article is not designed to promote, but should be considered professional content.