How to Get a Better Credit Rating
Get the Best Rates of Interest when Applying for Finance
Nov 14, 2008
Whilst it is possible to get by with a poor credit history, most people are going to want to borrow money at some point in their life. Whether it is for a credit card when abroad, a personal loan or a mortgage, the better the credit rating the lower the rate of APR that will be charged.
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Credit reference agencies always check the electoral roll as it proves that the person lives where stated during the application process. People running away from debt is one of the biggest problems facing lenders which is why lenders prefer home owners. A home phone number is also preferable to a mobile number.
Don't Make Too Many Credit Applications
Each credit search leaves an entry on a credit report and it stays there for 12 months. Making multiple credit applications will often result in all applications being declined. It flags an account as being potentially troublesome.
Check Credit File for Errors
All 3 major credit reference agencies (Equifax, Experian and Call Credit) can provide a copy of a credit report for £2. Experian is currently offering new members 30 days of free access.
Always check credit reports for errors as mistakes can and are made. If there are errors it is possible to contact the credit reference agency to get these corrected. Failing to do so could result in a credit application being declined.
Don't Pay Late, Miss Payments or Default on Agreements
Defaulting on agreements will normally confine someone to very high APR unsecured loan or a secured home owner loan. A late or missed payment, provided it is a one-off, will normally result in only a slightly higher charge for credit. Some applications will still be rejected.
Build a Good Credit Rating
A good credit rating can be achieved by having a history of punctually made payments. It will surprise many to find out that not ever borrowing money will be viewed negatively by a lender. A history of paying a credit card bill on time will quickly remedy this situation.
Close Credit Accounts that Aren't Used
It is surprising how many people have obsolete store and credit cards sitting in their desks. These will work against an application for credit so it is advisable to get them closed down. Make sure a letter is sent to the company as cutting the cards up doesn't close the account.
Even if someone has an atrocious credit history this will be wiped clean after a period of 6 years. Think carefully before taking on credit and always pay on time. If unsecured debt does become a problem there are a number of debt solutions that can be utilised to turn things around.
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