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How Can I Improve My Credit Rating?

21 February 2019 - Posted by TalkAboutDebt

When you apply for debt solutions, such as an IVA or even if you have CCJ against you these will be marked on your credit rating for 6 years. This article explains what you can do to improve your credit ratings.

 

How to get better credit ratings?

 

Your credit score improves through time and regular payments. It is damaged by missed or reduced payments and when you apply for credit. There are other factors such as not being on the electoral roll. Here are a couple of tips on how to improve your credit rating:

  1. Check your credit file: You can’t mend it if you don’t know what is broken. So you need to get hold of a copy of your credit file by contacting one of the two main Credit Reference Agencies. Check it and see if what is counting against you is true.
  2. Clean your credit file: If there are missed repayments or Default Notices, Termination Notices, and CCJ’s on your file, if possible, get them removed. If the negative aspects of the file have come from association with a friend or family member, an ex-spouse or even a possible fraudster. You will need to get a Notice of Dissociation from the Credit Agencies. If you can afford to pay off any or all of the bad debts on your file, do this and make sure you tell the Credit Reference Agencies they are paid.
  3. Get credit, spend and repay it: There are credit cards designed for people with average credit ratings. Get one and start spending what you can afford to pay back. Set-up a Direct Debit and make sure there are funds in place to clear the repayment.

For more information, please see our post on how to rebuild your credit score after insolvency.

 

When can I start to get credit again?

 

A bad credit history will show on your credit record for 6 years, during this time you may find financial institutions will start to give you limited amounts of credit. Different banks have different policies on who they will have accounts for, so it will be just a case of speaking to your local high street banks and seeing whether their policy will allow you to apply.

Please note, if you continue to take credit and not attempt to pay it back then it is inevitable that the creditors you owe money to will chase you for the money and may use court action to do so. With your agreement, a ‘Notice of Correction’ could be logged against your name with the major credit reference agencies. A notice of correction allows a short statement to be placed against the person’s credit rating that can give a reason as to why further credit should not be given to them. This will make it harder to take out further credit.

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