When it comes to improving your credit rating, it’s worth checking if it’s being affected adversely by simple factors such as address details or more complex ones such as poor payment history and adverse credit.
First things to check when it comes to your credit rating are:
Are you listed correctly on the Electoral Register?
This might seem simple, but if your banking address details do not match your ‘residential address’ on the government database, lenders will failing you when searching for identification purposes.
Do you have any mistakes on your payment history to creditors?
Sometimes errors can occur and what appears to be a missed payment, default or CCJ can actually be a computer error – go through everything with a fine toothcomb and challenge anything you genuinely feel is incorrect.
If everything is correctly listed and up to date and your credit score is still low it is time to start rebuilding it. Below is a list of checkpoints to consider.
Time your applications wisely
Check your credit history beforehand and do not make too many applications at once – the number of credit checks on your file will affect your score. If in doubt, ask the lender to perform a ‘quotation search’ instead of a full credit search.
Get a landline
This may seem unusual, but having a fixed line telephone number increases your level of identification and also due to phone companies having to credit score you, shows you have passed a previous search and demonstrates a level of financial responsibility.
Close unused accounts
Close any old accounts you no longer us and make sure any debts paid off in full are listed on your credit history.
Consider taking out a credit card (if you do not have one) with one of the higher interest rate lenders such as Vanquis. Although these are not an attractive deals due to the higher rates, if you spend only a little and make the payments regularly, you will build up a better repayment history over time.
Make payments on time
Missing payments can very quickly start to affect your credit score and if consecutive payments are late could eventually lead to a Default or CCJ which are very serious and stay on your file for a number of years.
If you are financially linked to anyone, make sure it is still relevant.
Joint finances, either with creditors or joint bank accounts can seriously impact your credit if the person with whom you are linked has adverse history.
If you are linked to an ex partner, write to the credit reference agencies and ask for a notice of ‘disassociation’.