Your credit rating will have a large impact on your ability to borrow money. If you have a history of missed repayments on credit cards or utilities or county court judgments (CCJs) against you, you may be suffering from a bad credit score which is inhibiting your opportunities to borrow.
There is no such thing as a universal credit rating, nor is there a blacklist. Each lender makes up its own set of criteria as to what constitutes a sound borrower. There are, however, three agencies which store the information they base their decisions on – Experian, Equifax and Call Credit. If you have problems getting credit you can request to see the information they hold on you. This may help to identify any problems you are facing and it doesn’t hurt to check that there are no errors on your file. If you need any help with this, or need the information explained, then speak to independent financial advisers.
What if you are suffering from a bad credit score and need to improve your rating quickly? There are some simple things that you can do right now which will have a significant impact on your chances of borrowing money.
Keep Up with Repayments
If you have current debts then it is crucial that you meet all the repayments that are due. If you cannot, make sure you inform your debtors and try to come to an arrangement with them that is suitable for both parties. This is the most important step – don’t make your credit score worse.
The Electoral Roll
It’s a simple step, but if you are not registered on the electoral roll then you will find it very hard to get credit.
Spend and Pay
Spend small amounts on a credit card each month and make sure you pay it off each month too. This shows banks that you are responsible and reliable – the sort of person they want to lend money to – and it will greatly improve your chances of being approved.
Clean Up Old Accounts
Get your financial house in order. Close any unused accounts – these are liable to fraud and closing any that are inactive or unnecessary can count in your favour when your application is being considered. Also, make sure you have the same address on everything – if you don’t lenders will ask questions.
Fewer Applications
Don’t make too many applications too quickly. This will appear desperate and will be cause for concern to lenders. Also, if there are issues with your application or the information you provide, wait until these are resolved. Failed applications in the past are red flags for future lenders.
Following these five tips should greatly improve your chances of getting credit. If you need any help with any of these points, or would like assistance acting on them, please do give us a call. We are leading independent financial advisors with offices across the South of England and have well over twenty years experience in advising all types of business’s and individuals finances.