If you have bad credit history that’s been giving you headaches for quite a while, it’s time to do something about it. Just because you stumbled once doesn’t mean you have to live with the consequences forever. If you want better chances of approval for your personal loans, mortgage deal or even with your mobile phone contract application, there are practical and effective things you can to help boost your credit rating.
Check Your Credit Files
While errors or mistakes seldom happen, they are possibilities which you don’t want to overlook. Instead of simply accepting your bad credit history, it pays to take your time and check your file before any major application. For UK residents, credit reference files are held at three major agencies: Equifax, Callcredit and Experian. Try to check with all three agencies if you can for comparisons sake. While at it, make checking your files a habit annually so you know where you stand credit-wise. Remember that errors on your credit files can ruin your applications so might as well take the time to do your own checking.
Minimize Credit Card Applications
The truth is, there is no universal credit score that lenders use when considering your application. One lender may reject you but that doesn’t necessarily is the case with other lenders. Some experts will tell you to just keep on applying but that’s not always wise either. Though you need to apply to know if you’ll get accepted, your applications may leave footprints on your credit file and may affect future applications. What you can do instead is make use of free eligibility checks to know the odds of being rejected or approved.
Register to Vote or Add Proof of Residency
Make sure your name is on the electoral register. If it isn’t there, it’s going to much harder to obtain credit. To register, simply go to About My Vote and enter your postcode to find your local council. You will then need to fill out the online form, print it and sign it so you can send it back to the electoral registration office.
In case you’re not eligible to vote in the UK, you can add proof of residency instead. This is applicable for foreign nationals. What you can do is send proof of residency such as your driving license or utility bills to the three credit reference agencies in the UK.
Steer Clear from People with Bad Credit
When you’re sharing a financial link with someone through a product or service, there is a likely possibility that your credit score is going to suffer if they have poor credit history. Whether it’s your flatmate, boyfriend or girlfriend, joint accounts or bills mean that you are scored together with the other person. When assessing your application, it’s not only your files that are accessed but the other person’s as well.
If you’ve also broken up with someone you have a joint account with, make sure to de-link from the person to avoid further complications.
Commit to be a Responsible Payer
Probably the most obvious tip out there when boosting credit scores is to pay on time. That means no miss or even late repayments. Yes, it’s hard to pull off sometimes but it is better that way than suffering for years because of missing once or twice on your monthly dues.
To ensure that you’ll never miss with your repayment dues, set up everything by direct debit. This way, you’re off the hook thinking about several due dates in a month. Your debit card takes care of everything; all you need to do now is make sure there’s enough money in the bank for said repayments.
Take Advantage of Credit Builder Prepaid Cards
Using credit builder prepaid cards to rebuild your credit score is another simple step to take advantage. Just look for prepaid cards with a credit-building option. What these cards do is allow you to borrow a small amount, say £50 which you need to repay in typically over a 12- month. That means your monthly fee is about $4. Provided that you did not miss any repayment, your performance will be reflected on your credit report.
Just keep in mind though that prepaid cards come with extra charges. Some prepaid card companies, for example, charge 2.5% on everything you purchase.
Recheck Your Credit Files if Rejected
Going back full circle, the last tip we have included here is to check your credit files after you’ve been rejected for a loan application or any application for that matter. Don’t get sucked up with the cycle of rejection. Instead of applying elsewhere after a rejection, take time to recheck your credit files to correct any errors if there are any.
While we know that you’re in hurry to get approved for a loan or a mobile phone contract application, it pays to double check your credit files. This way, you avoid more applications which only lead to more searches thereby making the problem more complicated.