Rate Tarts Could Affect Their Credit Rating

Brits who regularly exploit the interest free period on credit cards can potentially save hundreds of pounds but they can also harm their credit rating in the long term, a leading credit agency warns.

Rate tarts - those who move their balance from one provider to the next before the interest free period runs out - can cause themselves problems when they apply for mortgages and other financial products, according to Equifax.

In 2005, the credit reference industry launched a "quotation search" to check whether those looking to borrow money had previously shopped around for credit.

Many lenders now use this database, which is good for the industry but bad for the so-called rate tarts who could consequently have their applications rejected.

Neil Munroe, external affairs director at the credit reference agency Equifax, advises people to check their credit history before a potential provider does.

He said: "Lenders will need your permission to carry out a credit check and you can take this opportunity to find out what type of check, credit or quotation, will be logged on your file."

"A number of searches for a similar product in a short space of time could have an adverse affect on your credit record."

Credit files only list the number of searches made and do not reveal whether someone has been declined credit or not, meaning a high number of checks might appear like a long list of rejections.