Repairing a poor credit history is becoming increasingly important as many lenders continue to use strict criteria to determine whether or not you qualify for credit. Follow these five sure-fire ways to help repair a poor credit history.
1. Minimise Applications: Shopping around can sometimes leave you with a credit footprint the size of an elephant, so be aware that nearly every application for credit - mortgages, credit cards, loans - triggers a search of your credit report that leaves a record. Limit your applications and leave plenty of time between them so as not to cause problems.
2. Ditch Unused Credit Cards: If you have more than one credit card, it would be wise to get rid of some as lenders not only look at how much money you owe, but also how much money you could borrow in total. Owning more than one card pushes this borrowing limit up and can be used against you. Got credit card debt? Look for the best deals and compare balance transfer credit cards. 3. Pay on Time: Prompt payment of monthly bills like broadband or mobile phones, credit cards and utility bills will show that you are a credit worthy applicant. Cut your bills now – compare gas and electricity and compare broadband.
4. Get on the Electoral Roll: one of the simplest ways to help repair a broken credit history is to get on the electoral roll - lenders use the electoral roll to see if you are who you say you are and as a precaution against fraud.
5. Take Out a Loan: Taking out and repaying a loan will show to future lenders and credit reference agencies that you are able to repay credit. Short term loans are often a quick and efficient way to improve your credit record. But remember, this process only works if you repay the loans, so if you can't afford to pay it back, don't take it out in the first place.
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