About credit

Annual percentage rate (APR) is a standardised way to show the cost of borrowing over a yearly period.

It is used when comparing credit cards or loans to help you understand the cost of borrowing. It takes into account the interest rate and additional charges of a credit offer. The APR only includes compulsory charges such as annual fees.

It is also based on purchases only and doesn't look at different rates and fees which might apply if you use the card in different ways. For example, fees charged for the processing of balance transfers, cash withdrawals or foreign usage are not included. It also doesn't include any fees or charges that may be applied if you are late with payments or you go over your credit limit.

All lenders have to tell you what their APR is before you sign a credit agreement. You should always check the terms and conditions.

A credit limit is the most you can spend on your Capital One credit card.

Each time you spend on your credit card, the amount gets added to your balance. The difference between your balance and your credit limit is how much you have left to spend.

Your spending shouldn't go over your credit limit. This includes balance transfers, cash withdrawals and any charges, interest or fees that we add. If it does, we may charge you an overlimit fee.

To check your credit limit, your current balance and the amount you have available to spend, go to your online account.

The minimum payment is the lowest amount you must pay each month to avoid a late or missed payment fee. It includes any interest for the month, plus any fees if you missed a payment.

The minimum payment isn't a fixed amount: it's a percentage of the balance. As the balance goes down, so does the minimum payment.

By only making your minimum payment, you'll take much longer to clear your balance. That's because it's the lowest amount you can pay.

The quicker you clear your balance, the less it costs in interest. So always try to pay more than the minimum payment.

For more information, see your terms and conditions.

Your credit history is a record of your credit accounts over the last six years. It also includes public record information. Here are a few examples of what's in your credit history:

• Electoral roll information
• CCJs and bankruptcies
• Accounts (for example, payments towards credit accounts, loans, mortgages, overdrafts, mobile phone contract)

Credit reference agencies collect and look after this data. There are several of these in the UK, including Experian, Equifax and TransUnion.

When you apply for credit, lenders ask the credit reference agencies to see your credit file. This is the record of your credit history. Lenders use your credit file to make a decision about your application.

We use information from credit reference agencies to help us make decisions about applications for credit. For example, we do this when you use QuickCheck and when you make a full application.

Here are a few examples of what credit reference agencies can tell us about you:

• Electoral roll information
• CCJs and bankruptcies
• Accounts (for example, payments towards credit accounts, loans, mortgages, overdrafts, mobile phone contract)

Credit reference agencies work with us and many other businesses to collect this data. They include building societies, mobile phone companies, and retailers.

Yes. You should contact the credit reference agencies. They collect and look after the data in your credit history.

The agencies charge for this service.

• Experian opens in a new tab
• TransUnion opens in a new tab
• Equifax opens in a new tab

If any information in your credit file isn't true, you should tell the credit reference agencies.

Your credit score is a number that gives a snapshot of your credit health. Having a high score is a good thing. It's a sign that you manage your finances responsibly.

With a good credit score, you should be able to get better products with higher limits and lower rates. This could mean, for example, cheaper car insurance or a higher credit limit.

That said, having a good credit score isn't a guarantee. Lenders use lots of other information to make their decisions.