Bad credit isn't for life! Your credit score can improve by taking action and here are a few tips you should follow:
1. Check your credit report. We always recommend to take a pro-active approach and obtain your credit report, especially if you want to apply for a mortgage or looking to remortgage. It is very easy to obtain a credit report with many credit scoring agencies available on-line offering a 30-day free trial. Check your credit report for any inaccuracies and correct them straight away.
2. Register on the electoral roll and ensure your credit record shows your correct address history. Lenders use this to confirm that you are who you say you are.
3. Pay off your debts. The amount of debt you have is one of the biggest factors that goes into your credit score, it accounts to 30% of your score. It also takes into account how close your loan balance is to the original loan amount. Paying your loan balances is better for your credit score.
4. Pay your utility and phone bills on time. Missed and late payments can stay on your credit file for up to six years.
5. Build your credit history with a credit card by using this little and often. Spending small amounts on your credit card and paying it off each month makes you more attractive to lenders. However, make sure you keep the amount you spend on it at less than 30% of the total credit limit. This will boost your chances of your credit limit being increased over time, it will also make your repayments easier to manage.
6. Disassociate yourself from any financial partners with a poor credit history as their low credit rating may impact yours.
7. Avoid making multiple credit applications in a short space of time. This may have a negative impact on your credit history by showing lenders that you are “hungry” for credit.
8. Save for a deposit – having more deposit will increase your chances to find a lender who will be flexible enough to consider someone with a patchy credit history.