Our top tips could help you improve your credit profile
It’s important to check your Credit Report
carefully to make sure there are no errors. Here are the main points to look
out for:
- It’s vital that your Credit Report shows that you’re registered on the Electoral Roll at your current address.
- If you’re not registered to vote, if you’re registered at an old address or if the Electoral Roll has any incorrect details listed about you may be refused credit.
- Make sure that all regular payments, such as utility bills or debt repayments are registered correctly to your name and current address.
- Check for any other mistakes on your file, such as accounts you thought you’d closed that are still open, or any new financial arrangements you don’t recognise.
- Try and minimise the amount credit you have available to you, as this can sound a note of caution to potential lenders. Contact your credit card providers and ask them to reduce your credit limits.
If you’re concerned about your ability to repay any debts you have it’s
important to be proactive as missed payments will have a negative impact on
your Credit Report:
- If you’re finding things difficult contact the lender or lenders concerned and talk to them honestly about your situation.
- Most companies prefer that you continue to make payments to them rather than defaulting, so negotiate smaller payment amounts.
- If you would like help and support with these negotiations try speaking to your local Citizen’s Advice Bureau, a charity which helps people resolve their legal, money and other problems by providing free, independent and confidential advice.
It’s also worth considering the types of credit applications you’re
making and how frequently, as going about it the wrong way can have a negative
impact on your Credit Report:
- Only apply for credit you’re likely to get. The fewer failed applications on your file, the better.
- Don't make too many credit applications in a short space of time as lenders are more likely to feel nervous about you.
If you’ve never had any credit agreements it could count against you as
potential lenders have no way to assess whether or not you’re going to be a
responsible borrower. You could consider developing a well-managed credit
history in the following way:
- Take out a credit card at a low interest rate.
- Spend relatively small amounts on it every month. Perhaps consider making it the card you always use to buy your food or your petrol.
- It’s crucial to then pay off the outstanding balance on time every month to ensure you’re not being charged interest.
- Keep up the cycle of expenditure and on time payments for at least six months.