Until you’ve experienced a bad credit rating, it’s hard to imagine just how much it can affect your life. It can stop you from getting loans and credit cards even when you have the means to pay them off and can hurt your ability to secure a mortgage or rent a property.
If it feels like a bad credit rating is putting your life on hold, here are some tips from the experts:
The Money Advice Service recommends making sure you are on the electoral register as a first step. Being unregistered, or being registered with the wrong details, can affect your ability to get insurance, apply for jobs and even get a passport as well as your credit score. Visit the About My Vote website to register online.
Martin Lewis of Money Saving Expert advises leaving some time in between applications for credit, as well as other things like car insurance and mobile phone contracts. A large number of credit searches on your file within the same short space of time can lower your credit rating. It’s best to apply when you’re earning a wage and have a permanent address.
Vanquis Bank, which offers credit to people who have been turned down elsewhere, recommends taking out a card with a small credit limit and staying on top of your payments – if you can consistently demonstrate that you are able to repay credit, your rating will increase over time.
Moneysupermarket.com recommends setting up direct debits and standing orders with your bank to ensure that all bill payments go out on time, as missed payments will count against you on your credit report. Additionally, if you have the means and will not incur early repayment penalties, try to clear any loans or credit agreements ahead of schedule – this can open the door to more competitive lending in future.
Credit check agency Experian says you should review your credit report regularly to make sure it’s up to date and reflects your current circumstances – any inaccuracies on it can harm your credit rating. If you’re still linked to an ex-partner who has a bad credit rating, and you no longer share joint accounts with them, you can fill out a disassociation form to prevent any link with them.