A credit rating is something that everyone has but few people know much about. If you have bank accounts, credit cards or bills then you have a credit rating. A credit rating is basically a three digit number which indicates to potential lenders how likely you are to repay debts. In essence it lets the lender know how much of a risk they are taking when they allow you to borrow money and dictates the rate you will pay on a loan and whether you get one in the first place.
Given that this three digit number is referred to any time you wish to take out a loan it can play a very important role in your life, often restricting the options available to you at different times in your life. In our society where credit plays such a vital role, having a good rating is essential.
Being so important to you financial life it can benefit you to find out more about credit ratings so you can use them to your advantage by boosting your credit rating to improve your chances of getting a good credit deal. Unfortunately the vast majority of the information the public receives about credit ratings comes from dubious sources.
Many companies that advertise in newspapers, magazines and television claim they can repair your credit rating for a fee. However, what they do not tell you is that it is possible to fix your credit rating yourself or with professional help for free.
If you are in the UK, the first thing you need to do is to get hold of your credit reference file from the likes of Experian for £2, then you can start to take positive action to improve your rating.
But how to fix my credit rating?
If you find yourself with a bad credit rating you are probably asking me “how to repair my credit?”. Thankfully there are a few things you can do immediately that should have a positive effect on you rating.
1.You have to actually borrow some money to have a good credit rating. If you have never been in debt lenders won’t know whether you can handle credit so it may be worth getting a credit card and using it wisely, without incurring charges, to build your credit rating.
2.Register to vote. Credit reference agencies like to know where you live and being on the electoral role allows them to confirm your name and address.
3.If you have any CCJs against your name, pay off the debt in full and have your records amended.
4.Ensure that you and your family always pay bills on time as lenders see the information relating to family members when looking at your file.
5.Don’t apply for credit to multiple lenders after being turned down as a large number of applications can make you look desperate for money.
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