Having problems paying your bills? Still pondering over what you could do to repair that damaged credit? This is no reason to worry, given that you’re not the only one. Over five million people in the United Kingdom have damaged credit ratings thanks to their inability to pay back loans and credit card dues on time. Although your credit might be ‘fine’ you would still like to see it improve. The better the credit rating the lesser would be the interest that you pay and this opens up a number of insurance policies that one can adopt. It is very important to asses where exactly you’re right now in order to improve your credit score in the future.
Companies usually approach the three main credit rating agencies in the UK for finding credit information on prospective customers. It should be noted that companies don’t have to offer you credit, and are not required by law to disclose reasons for refusing credit, but they are obligated to divulge which credit rating agency they got their information from. You can obtain a ‘Statutory Credit Report’ from any of the credit reference agencies for a fixed fee of 2 pounds, though more services like online access may be available for a higher fee. Now let’s get on to repairing your credit rating.
First and foremost, apply for a credit card if you don’t have one. Having a balance alone isn’t enough for good scores. Apply for a card that reports to all three credit bureaus. The option of a secure credit card could also be considered in case the option of regular one is non-existent. Combining credit card dues with an instalment loan could bring about sizeable improvements in your credit scores. Clearing your loan and credit card dues highlights one’s responsibility. A community bank or a credit union could get you the best deal. Ensure that the loan is reported to all three bureaus.
Paying down or paying off from revolving accounts can improve your credit scores drastically. Lenders are known to see the gap between amount of credit used and the available credit limits. Getting the balance below 30% of the credit limit would be of great help. The trick is paying off the card with the highest rating first. Sometimes it is also advised to pay down the cards which are closest to their limits. It is also advised that you use your cards lightly. Having huge balances will surely hurt your scores, even if you clear all your bills in due time. Credit bureaus are sent reports of scores calculated which are based on prior statements.
One of the most important aspects of ensuring higher credit limits is checking your limits on regular basis. Scores generated can be purposely altered to show a lower limit than they actually have. Credit card issuers are known to update this information if asked about the same. If an issuer runs a policy which forbids him from reporting consumers’ limits, the bureaus are known to use the highest balance as a replacement for your credit limit. As long as you keep these aspects in check, you should be able to maintain a good credit score.