| Index »TIPS ON HOW TO IMPROVE YOUR CREDIT RATING |
|
| TIPS ON HOW TO IMPROVE YOUR CREDIT RATING |
| There are some things you can do which may help you improve your credit rating and therefore avoid being refused credit in the future.
|
| |
|
|
Make sure you are on the Electoral Roll at your current address. Most lenders consider this to be an important point. If you have recently moved, register on-line at www.rollingregistration, or contact your local authority. |
 |
| |
|
Ensure that any County Court Judgments that are issued against you are paid off and marked as satisfied on your credit report. If they have not been marked as satisfied, you need to contact the relevant County Court and ask them to provide you with a certificate of satisfaction that can then be forwarded to the credit reference agencies- Callcredit, Equifax and Experian. |
|
| |
|
If you have not kept up repayments on an account in the past that has now been paid off, check your credit file at the credit agencies to make sure the settlement of the money owed has been recorded. If it hasn't, contact the organisation in question and ask them to amend the record accordingly. |
|
| |
|
Make sure you make at least the minimum payment every month on your credit agreements. If you miss a payment, it will be registered on your credit file. |
|
| |
|
When applying for credit always provide accurate, truthful and complete information to the lender on your application form. Any inaccuracies or omissions may affect your ability to obtain credit in the future. Lenders are looking for evidence that you are able to repay existing credit on time, therefore it is important to pay your bills and credit agreements back on time. Obtain a copy of your credit file from the three credit reference agencies on a regular basis to ensure the information held is accurate and up to date. |
|
| |
|
Don't keep applying for credit if you've been previously refused. There was probably a reason for your refusal. If you make a large number of applications for credit each one will leave a credit search on your credit file. This may have a negative effect on your ability to obtain credit in the future as you will leave many credit search footprints on your file, which will suggest to future lenders that you are financially over-committed. But in a situation where the circumstances have changed for eg: you have recently lost your job, or are going through a divorce. You have the right to apply stating the reasons appropriately. |
|
| |
|
Place a Notice of Correction on your credit file if you need to explain your financial circumstances to any lender who may search your file. You can make a statement of up to 200 words, which has to be viewed by the lender searching your file. |
|
| |
|
| Answers To Some Of Your Credit File Related Questions
|
|
| How Can I Find Out Why I Have Been Refused Credit?
|
| Only the lender concerned knows why an application was declined. Whilst they are not under any legal obligation to inform applicants why they have been declined, most lenders will tell you the main reason for their decision. Lenders who use credit scoring as part of the application process adhere to the certain guidelines, which requires them to provide their declined applicants with a reason for refusal.
|
|
| Does My Credit File At The Credit Agency Show That I Have Been Refused Credit?
|
| No. Although the fact that a lender has searched our files is recorded on our in the Credit Search History section of your credit file, The credit agencies are not informed of the decision made by the lender. The Credit Agencies are not made aware of the reasons why your application has been declined. Only the lender involved knows the reason for their decision. |
|
| Do Credit Reference Agencies Tell Lenders Who They Should Lend Money To?
|
| No. Credit reference agencies collect factual information from various sources, which lenders use to help them make credit decisions. They do not offer opinions about an individual's creditworthiness. Lenders follow different lending criteria depending on the level of risk they are happy to expose themselves to and the volume of new accounts they need to acquire. One lender may grant someone credit, whilst another may decline the request. |
|
| How Do Lenders Decide Whether To Give Me Credit?
|
| They use a combination of factors such as information supplied by you at the point of application, Data supplied by a credit reference agency
about any existing accounts they have with the company using the technique known as credit scoring to help them decide whether to give you credit. Lenders also apply policy rules when assessing an application. For eg. When they consider applications from people who have a County Court Judgment over a specified amount. If someone applies for credit and the data supplied by a credit reference agency reveals the applicant has a County Court Judgment over this specified amount, the application would be automatically declined. Lenders use different credit scoring systems and policy rules, therefore if you are declined by one organisation this does not necessarily mean that other companies will make the same decision. |
|
| I Have Been Refused Credit - Is It Because I Am Not On The Electoral Roll At My Current Address?
|
| Electoral Roll information can be used in the decision making process to verify your name and address, however if you are not on the Electoral Roll at your current address most lenders will check the Electoral Roll at your previous address or will ask you to provide other forms of evidence to show that you live at your current address.
|
|
| What Is An Association?
|
| I have requested my credit file from the credit agencies and my credit file contains information about other family members. How are associations linked? |
| Associations are links held by credit reference agencies that indicate two people have a financial connection. The agencies create create an association if a lender advises us that a joint account has been opened. If your credit file contains an association connecting you with a person you no longer have a financial connection with, you should write to them to apply for a disassociation. They will investigate and make any necessary amendments to your credit file.
|
| In the past the credit agencies have been able to associate individuals with the same surname residing at the same address. This caused a large number of complaints. In 2001 it was agreed with the Information Commissioner (The body that regulate data protection in the UK) that the credit reference agencies would cease this practice and would only associate individuals where there was clear evidence of a financial relationship. Currently not all the agencies comply with this. As they have to deal with the complex system. Until they have made these changes, you may still be associated with other family members on their databases. If you do not have a financial relationship with the family members who appear on your Experian/Equifax credit file, you should apply to them for a disassociation. |
| |
| |
