If you find yourself with a less than desirable credit rating (perhaps you’ve just been turned down for credit or have suffered with debt problems in the past), then don’t despair! Bad credit doesn’t last forever and there are a few simple things you can do right now to begin repairing your credit score.
1. Request a copy of your Credit Report
To begin with order a copy of your credit report. This will provide you with all the information you need to begin repairing your rating. It is a good idea to request your report from the 3 main UK credit agencies, Experian, Equifax and CallCredit.
2. Clean up any errors on your Credit Report
If you finding any incorrect information on your credit report then you have the right to have it removed. The information on your credit report will include the steps you need to take to dispute any inaccurate information with the credit reference agencies.
3. Make sure you’re on the Electoral Roll
If you’re not already, it is important that you register with your local council to be included on the Electoral Roll. Not only will this gives you the ability to vote, but credit reference agencies use this information as a means to verify an individual’s identity, and not being listed could affect your ability to receive credit.
4. Don’t use your Credit Cards
It is important that you stop creating more debt for yourself by continuing to run up debts on credit cards and store cards. Until you have more control over you financial situation it is a good idea to put your credit cards away.
5. Stop applying for Credit
Whilst you are working on rebuilding your credit score it is also a good idea to avoid making any more applications for credit. If you have a bad credit rating there is a high chance that your application will be refused, which in itself can have a negative affect on your credit score.
6. Keep Delinquent Accounts Open
If you have any credit card accounts that have become delinquent it can be tempting to close them. But before you do, you need to make sure that it won’t have a negative effect on your credit.
7. Contact your Creditors
If you’re struggling to keep up to monthly repayments and are finding yourself missing payments and defaulting, then you might be surprised at the help you’ll receive by calling up your creditors. If you let them know about your current financial situation, they may offer a temporary solution such as reducing your monthly payments until you can get back on your feet.
8. Get on top of your Missed Payments
Your payment history makes up a large portion of how your credit score is calculated, so if you are behind with repayments it is important you settle them as soon as possible. Doing so will also safe you money on interest and further late payment charges from the creditor.
9. Pay off any outstanding Debts
In order to improve your credit rating you will need to begin paying off your current debts. If you don’t currently have the funds to do so, are there any belongings you could sell to speed up the process? Having to sell some of your possessions is a tough decision, but if the end result is getting on top of your finances and getting you back your financial freedom – then surely it’s a worthy sacrifice?
10. Seek professional Debt Help
There are a number of resources and organisations like the consumer credit counselling service who are there to offer advice and assistance to individuals struggling with debt. Give them a call and find out what solutions are available to you.
11. Be Patient
Chances are it’s taken some time for your credit rating to become damaged, and likewise it’s going to take a while for it to improve. But so long as you continue to pay off your current debts, and manage your finances well, over time you will start to see an improvement in your credit.
