Having a less than perfect credit history isn’t ideal for anyone, particularly in this recession. Prior to it, banks would hand out credit freely; it’s not as easy anymore. You may be suffering poor credit history for a number of reasons. It could even be because you’ve had little credit so far – an overdraft perhaps, but with no credit cards or loans.
You might be a student without regular income, or you may have recently moved to the UK. You may have low income, working part-time. Alternatively, you may be self-employed and you could find it difficult to prove that you have regular income.
Fortunately, there are many ways around this. For instance, if you’re intending on purchasing a car but lack the credit history to get you good interest rates on the loan, you could apply for bad credit car finance at Car Loan 4U. If you’re interested in building up your credit history regardless, have a look at the suggestions below.
Check your credit report for errors
This is the important first step that you have to take. There are three credit reference agencies in Britain: Equifax, Experian and Callcredit. They don’t decide what your credit rating is, but they send your credit information to companies where you’ve applied for credit.
The lender will then interpret the information received, and determine what your credit rating is. Legally, you are allowed to see this information. Pay them £2, and you will be able to have a look at all the details they have about your credit on file. Check it carefully for errors and let them know if there are any.
Clean up your accounts
When a financial company reviews your credit history, their decision is highly dependent on the bigger picture. They have been advised to be more responsible when giving credit, so they will assess the total amount of credit available to you.
Many people switch their credit cards regularly, to get the best rates, destroying their old cards right afterwards. This isn’t adequate, unfortunately. If you’re cutting up old cards, make sure you get in touch with the company and close the account. Failing to do so will affect someone’s decision whether or not to give you credit.
Don’t go overboard with credit applications
If you’ve been turned down for credit once, don’t go overboard with making multiple applications. This just doesn’t work, and it will definitely act against you.
It makes you look desperate and most importantly, it indicates that you’re going to be getting flooded with debt.