Improving credit rating

Credit rating tells a lender whether the person applying for the loan will be able to pay back the loan.  This information is held by specialist companies called Credit Reference Agencies and when applying for a loan, lenders often check with these agencies if a person is credit worthy.  If a person is found to be not credit worthy then he or she will be declined the loan and this maybe because they have missed payments or defaulted in the past. 

What is known as the credit score determines whether you are eligible for a loan and it should usually be to a certain threshold otherwise you will be deemed as a person with bad credit or someone with poor credit ratings. Once this has happened it is a long and difficult road back but every problem has a solution.

There are various ways in which credit ratings can be improved and we have put together tips on how you can improve your credit rating:

• Make sure you are on the electoral register at your home address
• Ensure all addresses on bank accounts and other financial accounts are the same
• Set up direct debits for bills including council tax, loans, home insurance, TV license and everything else that you pay on a regular basis. This will prove that you are keeping payments up to date
• Try and obtain a copy of your credit report and try and improve on some issues that are in your control of
• Compile a plan to see how much money you can pay back on existing debt
• Put a stop to your credit card purchases until you have no more debts