MyFinances.co.uk
News feeds Free newsletter

All the latest personal finance news - helping you make the most of your money

Associate Article

Improve your credit rating

Many people need credit; by having it you can pay for things you can’t immediately afford, or pay off debts. However, it’s not always easy to find; if you’ve been insolvent in the past or you’ve been poor at making monthly repayments then you’re likely to have a bad credit score. This means fewer banks will be willing to give you credit, and you may find your applications are being repetitively turned down. Despite this, there is no universal credit rating or credit blacklist, and there are plenty of ways to improve your credit score. Here are a useful few to get you started:

Get on the electoral roll

This is absolutely essential. Lenders use the electoral roll to check your address and who you live with. If you have no evidence of a fixed address then lenders are simply more unlikely to be confident lending to you. If you’re consistently being turned down for credit then writing to your local council and checking you are on the register could well be a very simple solution.

Be stable

While it’s not a quick fix if you have a poor credit history, having evidence of stability is good. If you’re a homeowner and have a long term employer then creditors are likely to see you as less of a risk. Additionally, merely having a savings account may help your chances – even if it has no money in it, having one suggests that you at least have intent to save.

Create a your own history

If you’re finding credit particularly difficult to find then there will almost certainly still be ‘high risk’ options. Many lenders, such as Monument and Capital, offer credit cards with interest rates of some 30 per cent, but they can be a good way to create a good impression. Get one for six months to a year, and make absolutely sure you pay it off each month. This way you’ll prove that you can be trusted on making your monthly repayments – it’s a particularly good tactic for those who have defaulted in the past.

Cancel unused debts, cards, and accounts

If you have a plethora of bank accounts and credit cards that you never use then lenders will probably be wondering why you need more credit. Cancelling unused accounts will lower your available credit, and then it will be possible to go for a cheaper option.

Check your credit report

There are plenty of companies on the internet that give you the opportunity to check your credit score. These give a rather woolly overview of your credit history, but it’s certainly a worthwhile enterprise if you can’t understand where you’re going wrong. Online credit agencies normally tempt people by offering them free trials, but you’ll have to set up a direct debit. The trial period can last up to 30 days, but you can cancel straight after seeing your score if you need to.

Further Information

Currently the lowest APR for a credit card on the Motley Fool website is 9.9 per cent from Capital One. Other credit cards, however, offer some great benefits; NatWest, for instance, offer credit cards that offer exclusive discounts to their wine club or travel club. Getting a supermarket branded credit card can also be a great way to save money – ASDA Finance currently offer 0% credit cards that allow you to redeem vouchers in store if you make purchases on the card or make a balance transfer.





Disclaimer:
myfinances.co.uk is not authorised to give advice under the Financial Services and Markets Act 2000.

Terms:
By using this site, you are deemed to have accepted our terms of use.

About Us | Advertise | Contact Us | Privacy
© 2004 - 2008 www.myfinances.co.uk

myfinances poll 

myfinances is running a poll to get your views and predictions on house prices.