Improve your credit rating

Good or bad, this guide will help improve your credit score. Once you have read the 7 steps, read the final paragraph; it is important!

7 Easy Steps | Credit Scores

 

                                       Step 1 – Get a copy of your credit report

Seems simple, but you need to know what is wrong before you can fix it. You can get a free credit report from Experian, Equifax or CallCredit, all of whom normally offer 30-day free trials: visit their websites for more details.

 

                                       Step 2 – Read the Report – Is the Information Correct?

Again, simple, but most bad credit scores could be down to having incorrect information.

 

a)      Is your name correct?

b)      Is your address correct?

c)      Are there any mobile phone contracts still showing?

 

Any information that is incorrect will be affecting your credit score. Using the address details stored in your credit file, write to any company that has incorrect information about you.

 

                                       Step 3 – Sign on the Electoral Roll - Register to Vote!

Yes, this has a massive affect on your credit score. It is so simple to do, just apply to the Government to join the electoral roll via the following link .

 

                                       Step 4 – Get a Credit Card

A credit scoring agency needs for you to have a credit in order for them to score you. Get a credit card, use it and pay it off in full. You must pay it off in full, otherwise you will worsen your credit score. Your credit report will start to show a credit where you borrow money and pay it off – now this is exactly what mortgage lenders want to see.

 

Remember, use it and pay it off every month, otherwise this won’t work. If you have struggled getting a credit card before, go to a company that offers credit cards to people with bad credit rating. The interest rate will be through the room, but don’t worry, because you are paying off the balance every month you won’t incur any interest penalties.

 

                                       Step 5 – Stay living in one place

Ever wonder why you get asked, “Have you lived at this address for longer than 3 years?” If you haven’t been registered at one address for a long period of time this will affect your credit rating because a mortgage lender wants to know where you live. If you keep moving, this shows a lack of stability and inconsistency increasing your risk profile.

 

Stay put and register everything you have to at this one address. Show a stable living and continuous residential address and your credit score will go up.

  

                                       Step 6 – Don’t Apply for Any Credit for 6 months

If you apply for lots of credit then every company will check your credit file. This could indicate that you are desperate for money and will have an impact on your credit score. Banks and building societies even check your credit score when you open a bank account.

 

Don’t worry, checking your credit score through Experian, Equifax or CallCredit will not affect your credit score.

 

                                       Step 7 – County Court Judgements, Bankruptcy Orders and Defaults

They are bad, but not the end of the world. They will stay on your file for 6 years and will play a factor in the decision to offer you a mortgage. Some mortgage lenders may take into consideration other factors such as several years of good credit scoring, continuous employment, savings and references. Speak to Share a Mortgage’s Mortgage Adviser for the best advice on this.

 

                                       What else do Mortgage Lenders look at?

Remember, your credit score is just one part of the process which mortgage lenders will review. They will also look at your application (affordability) and any previous dealings they have had with you.

 

                                       The Final Paragraph; it is important!

Getting rid of a bad credit score is like losing weight, it will only work if you stick to the diet . If you don’t, then you will always have a bad credit score and never get a mortgage.

 

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                                       Your 30 minute action plan:

 

1. Get your FREE credit report – takes 3 minutes – visit Experian, Equifax or CallCredit online.

2. Check your credit report for errors – takes 17 minutes

3. Sign up to the electoral roll – 1 letter or online form – takes 5 minutes

4. Get a credit card and use it, don’t abuse it – takes 5 minutes

5. Don’t move home – No time at all

6. Don’t apply for any credit – No time at all

 

With this 30 minutes of work and sticking to the plan, your credit score will improve each month.


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