How to improve a credit rating
If you are intending to attempt to improve your current credit rating you may wish to consider the following points.
Ensure that you are on the electoral roll. If you aren't on this it is not likely that you will be given credit by lenders because they will use this as a mechanism for verifying your identity. If they find it difficult to verify who you are, they are unlikely to give you the benefit of the doubt so don't make it more difficult for yourself.
You may have previously had a credit application rejected if you do not have a history of ever having had credit on your credit report. If you haven't had credit before, it is difficult for the lender to tell if you would be a potentially responsible borrower. Therefore, you may need to build up a credit history. This could be done by taking out a credit card and using this regularly, but always ensuring that the balance is paid at the end of the month. However, do not give yourself access to too much credit i.e. do not take out several unneeded credit cards as this could cause a problem.
If you have had a past credit problem that appears on your credit report, attempt to fix the problem before applying for more credit.
If you have been denied credit, do not immediately apply again as each time a credit is denied it will appear on our credit report and this may affect your credit score adversely. Also try to get the lender to do a “quotation search” for you as opposed to a “credit search” because a quotation search will not have a negative impact on your credit score.
Do not miss any payments on a credit agreement as this will be recorded on your credit report and may even affect your credit scoring for up to 6 years.
If your credit score is poor and you have a joint account with a partner you could consider making a joint application for credit. On one hand if your partner has a good credit score, they could help to improve yours, however, they could also bring your credit score down if their score is poor.
Should you have savings, it may be advisable to consider using them to pay off any high interest loans that you may have.
Finally, a lender will want to see that an applicant is low risk and shows stability. Homeowners and individuals in employment will generally be regarded more favourably than self-employed people that choose to rent a property.
CHECK YOUR FREE ONLINE CREDIT REPORT FROM EXPERIAN
For more detailed information on credit reports see our additional articles on the subject -
Credit reports - an introduction.
Understanding your credit scoring
GET YOUR FREE ONLINE CREDIT REPORT FROM EXPERIAN
Any information offered here is general and should be considered as purely informational in nature. Information here should not be construed as advice and it is offered without legal responsibility or liability. It must be emphasised that you should consult a professionally qualified individual or company (such as an accountant, financial adviser or solicitor for example) should you need advice on your financial situation, as they will be able to tailor their advice to your situation accordingly.