First of all don’t panic. The ability to receive credit of any type including loans, mortgages, credit cards or store cards has never been available freely.
When applying for credit you have to prove to the lenders that you are in full control of your finances and have proven in the past that you can be relied upon to make the repayments on time and in full.
If you’re thinking of making an application for credit, or have just been refused credit, then try not to panic – there are steps you can take to overcome this issue.
First off all you’ll need to grab a copy of the credit report. Checking your credit report is probably the best place to start as your report will contain lists of your previous borrowings aswell as giving you an idea of how well you’ve been managing your repayments.
Your credit report will provide you with a snapshot of your credit history, including all the credit accounts you’ve used and applied for in the past few years along with repayment information.
Many people underestimate just how important their credit report is, but it is the first thing many lenders check before approving any form of credit. In that respect it is crucial that your credit report is up to date and accurate.
If you spot some worrying trends on your credit report, mainly missed payments, default notices or CCJ’s, then you’ll have to look at ways you can improve your current credit rating before you’ll be approved for any future lines of credit.
Here are a few steps you can take to put yourself on the path to a healthy credit score.
Manage your finances
If you aren’t already doing so, make sure you start repaying your bills, credit card, loans, or mortgage repayments on time. By not doing so you’re only damaging your credit rating more, and in most cases incurring late payment fees and interest which only adds to the debt.
Check your credit report regularly
By keeping a close eye on your credit report and monitoring it regularly you stand a better chance of noticing any errors or incorrect entries that may appear. For example a single incorrect entry could result in a rejected credit application.
Talk to your lenders
If you’re struggling with repayments, then it’s always worth giving your lenders a call. In most cases they’ll help you to workout a schedule of repayments that you can afford or even offer a temporary payment holiday until you get back on your feet.
Don’t keep borrowing
If you are struggling with debt, then it’s important you stop borrowing. If you continue to increase the debts that you can’t manage, then that in turn will cause you to be rejected for any future credit that you might actually really need.
