Seven Simple Ways to Improve Your UK Credit Rating
- Add article to Digg / del.icio.us /
Furl
- FREE online credit check
- FREE Instant Mortgage quote
You need a good credit rating if you want the best deals on loans, mortgages, cards and other credit, especially when interest rates are shooting up.
Luckily, making an improvement needn't be rocket science - you can make a difference in just a week if you follow these simple tips.
Here are seven tips to improve your credit rating:
1. Register to vote
Lenders use the electoral register to check that you are who you say you are and live where you say you do. If your credit report shows you at an old address or not registered at all, you could be marked down, asked for proof of identity or even rejected. Go to www.aboutmyvote.co.uk for a registration form and advice.
You don't have to wait until the annual canvas - you can add your name to your local register at anytime - so do it as soon as you move in.
2. Check your credit report
This is a record of the credit you've taken out, your repayment history and any court judgments against you, plus other information relevant to your ability to repay what you borrow.
Lenders look at it when you apply to them for credit to help them decide whether to make you an offer and what terms to set - for example, what interest to charge. If your credit report isn't up to date or doesn't accurately reflect your circumstances, it could have a negative effect on your credit rating.
If you find anything on your report that needs changing, let the credit reference agency know straight away. If the record is accurate you can't change it, but you can make sure that any missed payments are not held against you by paying on time and settling any outstanding debts such as CCJs, which minimises their affect.
Click here to check your credit report for free
3. Mop up your footprints
Every time you apply for credit, the lender will check your credit report - and leave a search footprint. You'll get marked down if you have lots of searches, because lenders fear that you are over-stretched or even that a fraud is being planned, so watch out.
If all you want is a quote, don't make a full credit application, ask for a quotation search instead which will leave a footprint that does not affect your rating.
If a lender has mistakenly searched your report more than once in response to a single credit application, then contact the lender, explain what has gone wrong and ask for the extra footprints to be removed.
4. Update your relationships
You'll find a section listing your financial associates in your credit report. These are people with whom you have a financial relationship, such as a mortgage or joint credit card account.
Lenders may check the credit reports of your financial associates when you apply for credit, as their situation could affect your ability to repay what you borrow, so it's important to ensure that the list is up to date - or you could be penalised for someone else's financial problems.
Tell your partner to check their own credit report before you apply for credit, so that they can ensure it is up-to-date as well. If you've split from a partner or got divorced, you should close down joint accounts and re-open new ones in your name only.
Tell the credit reference agencies, so they can update their records too.
5. Talk to your lenders
If you've been rejected for credit, ask the lender to tell you why. It could be as simple as not matching the customer profile for that product, or that you already have multiple credit accounts - even if you are making all your repayments on time.
6. Simplify your borrowing
Do you really need all those credit cards? Would it be less expensive to roll up several debts into a single loan? Be careful if you take this route - make sure you're not paying more over time. Your credit rating could benefit if you can streamline your borrowing – and you'll find your finances easier to manage, too.
7. Explain yourself
If there's a good reason for a blip on your credit report, you may be able to add a Notice explaining what happened - perhaps you were made redundant or were ill but things are okay now. Lenders may take your circumstances into account. Contact a credit reference agency and ask for advice.
If you manage to sort out even one problem, you should improve your credit rating - but you might want to keep checking your credit report to be sure that once the relevant changes have been made, no new problems crop up.
To view your personal credit information that lenders are currently basing their credit decisions on, apply now for a free online credit report. Click here for a free 30-day trial and a free copy of your Experian credit report
| 
