Improving your credit rating – Top Ten Tips

1. Get hold of your credit report and check it for accuracy. Your credit report holds all details about different loans and repayment histories. Lenders use this when deciding whether to make loans or not. If you see anything is wrong inform the relevant authorities and seek for it to be amended.

2. Be careful about apply jointly for loans with other who have a bad credit rating. This will adversely affect your own chance of getting the loan.

3. Manage finances carefully. Always seek to avoid making late payments. For example a good piece of advice is to set up monthly direct debits which pay the minimum balance on your credit cards.

4. Communicate with your bank and loan companies. Banks are not as bad as we might fear. If we are suffering temporary difficulties it is worth speaking to them to try and arrange a temporary overdraft or loan. Arranged overdrafts and loans may incur interest but they do not adversely affect your credit rating.

5. If by accident or chance you do make a late payment on any loan. The first thing to do is to send the payment straight away. Then you should contact the financial institution and ask them very kindly to consider forgiving your transgression. You may be surprised at how often they are willing to make exceptions. You could always use the excuse “it got lost in the post”

6. Protect your identity. Identity theft in the UK is a growing problem in the UK. According to the government it costs £1.7bn, though this may be an understatement. Take steps to avoid your identity being stolen. If there are any problems make sure it hasn’t unfairly affected your credit rating.

7. Don’t bother with credit repair companies. This is nothing that legally they can do to change your credit rating.

8. Consolidate loans. Consolidate your loans into the lowest interest bearing one possible. This makes it easier to keep track of payments and will also save you interest payments

9. Avoid overspending. Unfortunately the easiest way to protect your credit rating is to be frugal and careful in your spending so that you don’t go into debt in the first place.

10. Always tell the truth. If you lie on forms you will be found out, and this will count against you.

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