Having bad credit can limit your borrowing options but there are simple ways to improve your rating and become a low-risk borrower.
1. Check your current credit rating
Make sure you have up-to-date information about your credit rating by checking your credit report. Or, if you've been refused credit, you can ask for a review of your credit application under the Data Protection Act.
2. Pay bills on time
Make sure all your bills are paid on time. If you make an unavoidable late payment, or miss a payment, it is important that you pay the full amount the following month. Explain to your lender why the payment was delayed or missed. This is particularly important if you were unable to pay because of illness.
3. Get on the electoral roll
Being registered to vote helps lenders confirm your name and address, which immediately boosts your rating. The electoral list is updated regularly, so even if you have moved recently, it won't take long until you appear. You can contact your local council to check these details.
4. Cancel unused credit cards
If you have credit cards that you don't use, cancel them. Having too many cards means that you have more access to credit, and this can be seen as a problem by lenders.
5. Joint credit
If you are financially linked to someone - through a joint billing account, for example - the other person's credit will affect yours. If your partner has bad credit, it's advisable to keep your finances separate so that your credit rating is not affected.
6. Don't keep applying
If you have been refused credit, it is tempting to approach other lenders. This should be avoided until you check your credit rating and improve your credit. Multiple rejections appear on your credit report - so you should only apply again when confident that your application will be approved.
Related articles
Keep your finances in check
One way to keep track of your finances is to check your credit report regularly.
A credit report allows you to:
- Understand & manage your credit status
- Get unlimited online access to your credit report
- Order your National Credit Score
- Improve your credit rating
- Get freephone customer advice
Useful links
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