Harry Price 4m 535 #repaircredit
The views of this article are the perspective of the author and may not be reflective of Confessions of the Professions.
Life is all about ups and downs, and if you’ve been through a period of financial difficulty, then you might be glad it’s all over. Or is it? Unfortunately, the effects of struggling financially can last long into the future, in particular when it comes to your credit score. It might be unfair, but all those missed payments will stay on your record for six years…even if your situation is much improved. You could have won the lottery, and still find you’re not eligible for a loan!
So rebuilding your score is important to get back to a friendly footing with lenders. And if you play your cards right, you can see improvements within a couple of years. So read on, to find out how.
- A poor credit record is fair enough. But any errors on it don’t give an accurate view of your financial history and will damage your rating. Always make sure there are no mistakes in your record by ordering a copy and going through it with a fine toothcomb. If you do find errors, have them corrected immediately.
- Get yourself on the electoral register. This has a big impact on your credit record, as failing to register suggests to lenders that you’re a bit of a ‘fly-by-night,’ especially if you’re constantly on the move. They may also be unable to trace you if you default on any debt.
- Use direct debits to pay existing bills on time. Missed payments will continue to damage your record, because it suggests that you’re in financial trouble.
- Always close any unused back accounts or credit cards that are no longer used. This is especially important if they offer lines of credit.
- Never use more than 25% of the credit available on your credit card. Credit repair credit cards can be a useful way of rebuilding credit, but payments should always be made on time, and the card should never be maxed out. You should also avoid withdrawing cash on credit cards. This suggests desperation.
- Avoid making multiple applications for credit. Every time you apply for credit and are rejected, it adds to another black mark on your credit score. Always space out applications and only apply for credit from lenders you are eligible to borrow from. A scattergun approach can be very damaging.
- Even though a poor credit history can impact your ability to borrow, so can no credit history at all. If you need to prove your ability to manage credit, then use a credit card sensibly to build up a credit history.
- New rules from March 2015 require the Child Maintenance Service to report Liability orders for arrears in child maintenance payments.
- Keep yourself updated on your credit report. Regularly check your report for accuracy and the recording of payments. However, credit reports can be complex, so if you have problems in understanding your report, use an online credit report company who provide clear analysis and explanations of your report and score.
- License: Image author owned
By Harry Price
About the Author
Harry Price is a freelance writer and artist from the south coast, who in his spare time is a English tutor and marathon runner.