How to Improve Your Credit Rating in the UK
A low credit rating can be a serious obstacle to obtaining a loan, credit card or mortgage, yet there are practical ways to help boost it over time. It is a good idea to check your credit file annually as part of your long-term financial planning and then take immediate steps to repair your rating if it is damagingly low. Martin Lewis, the founder of Money Saving Expert, says that you have a legal right to see your credit report for just $3. If you improve your credit rating, you will become a more attractive proposition to lenders.
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Instructions
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Get a copy of your credit report from Experian, Callcredit or Equifax. Order online or request a copy by mail, which you will receive within seven working days.
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Check you report to make sure all your personal details and debt and payment details are correct and up-to-date. Consider adding a "notice of correction" to your file, explaining why you missed payments, if there is a good reason for this.
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Get rid of all unwanted store and credit cards, because these lines of credit could show up on your credit file. Call the card provider and close the card account, then confirm this in writing. Lenders are wary of anyone with access to high credit limits.
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Improve your credit history by paying loans and debts regularly, particularly if you have missed payments in the past. Set up direct debits for loans and cards so that the minimum is always paid on time.
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Ensure that your credit score is not being damaged by someone you had financial links with in the past. Contact the three main credit reference agencies asking to disassociate yourself from them, and explain your reasons. The agencies will send a form that you must complete, including details of who you want removed from your file.
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Tips & Warnings
If you do not have any store cards, loans or credit cards, you might rejected for credit because you do not have a payment history. Take out a credit card with a low limit, and pay it back each month in full.
Credit rating improves if you have stability in your life, particularly if you have lived at the same address for over three years and have been in the same job for at least six months. A telephone landline, rather than a mobile phone, also helps prove stability.
Avoid agencies that promise to improve your credit rating but charge for the service. In most cases, with the right information, you can do as much as they can.
References
- Photo Credit scissors and credit card cut in two image by Warren Millar from Fotolia.com
