Getting over a Bad Credit Rating
Credit files on almost every adult
in the UK are kept by credit reference agencies
which supply information about your credit record
to lenders. If you have a bad credit rating
lenders do not have to tell you exactly why they have turned
you down, but they should give you an indication of the
reason, such as information provided by a credit reference
agency.
No matter how bad your past it is
possible to recreate a good credit record.
It simply requires a well planned and well executed campaign.
The campaign outlined below uses credit cards
as the primary weapons in overcoming a poor record, as they
are relatively easy to obtain. They must be used carefully.
You can vary this, using the same steps, for mortgages and
loans.
The steps in this two year campaign
avoid the need to tell "fibs" on application forms
( a crime, by the way) and will help to overcome a bad credit
rating. They can be varied according to circumstance:
Credit Cards as the key to a bad rating
strategy
1. Get a credit reference
agency report on yourself to establish the scope
of your problems (see below).
2. Pay out any outstanding judgements.
3. Apply to those lenders so moved,
to provide you with a very small credit limit on one of
their basic cards, say £200. Click on the button below
to get a list of these.
4. Open a savings account and apply
for a bank based credit card, again asking for a small credit
limit amount, say £500.
5. Use these cards just shy of the
maximum, and pay them out before the billing period for
about six months. Keep the bank account in positive balance,
say £200 in credit, and make your card payments via
that account.
6. At the end of six months ask the
bank to raise your credit limit to say £1000. The
other lender will generally contact you
a month or so later offering a higher limit.
7. At the end of the first year apply
to your banker for a small personal loan,
say £2000. Pay it according to the terms, without
fail.
8. At the end of the second year,
take out a mortgage, buy a car, go shopping. As long as
you do it within your means, you are away clear.
Start building your credit card rating online
Click on this button to go to our
credit cards page and select "Yes"
where it asks if you have a bad credit history. We'll find
you an adverse credit card provider who
will start rebuilding your credit rating.
Mortgages for Adverse Credit |
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As with all credit rating renewal
strategies, start out by going through the steps above for
a credit card strategy, but instead of applying for cards,
you're looking for a mortgage. We do have lenders who specialise
in people with CCJs, arrears problems, or no certification
of salary level. If you are prepared to pay for it, there
are several companies who will accommodate you for a mortgage,
despite every setback you can imagine.
You will need a deposit (in real money),
and be in a position to carry through the project for at
least seven years, at which time you can swap financiers
with no questions asked, and probably get better terms.
The point is that a penalty rated
mortgage (because that's how it works) is a heavy way to
fight back on a credit rating. If you get it wrong you are
worse off than before.
On the positive side, however, if
you are accepted for a mortgage, then the providers of other
forms of credit (overdrafts, loans, credit cards) swiftly
ignore your past.
Get into a mortgage, even with a bad credit rating, online
You may think you've blown your mortgage
prospects for ever, but hold the phone! Click on this button,
fill in the form and who knows, you may look more like Snow
White than a Wicked Sister to some lender out there . .
. don't forget to tick any boxes that ask you if you have
an adverse rating. It will speed the process up, no end.
Loans for poor Credit ratings
This is tough. You do all the steps
as for credit cards (above) but instead of asking for cards,
you apply to our lenders for an adverse credit personal
loan. Most of the risk lenders want property for collateral,
so if you don't hold a mortgage, it may be better for you
refer to the strategies above.
On the other hand, if you do hold
a mortgage some of the high risk financiers are willing
to look on it as being worth 125% of its value. So you just
got an instant equity position to borrow against.
Applying for a loan online with a bad credit history
Even if you think your credit rating
is so bad you don't stack up for some high risk finance,
it's worth clicking on this button, filling in the form,
and checking out what comes back. If you get a string of
questions you'll be able to figure out where you fall short,
and do something about patching it up . . . remember to
tick any box that asks if you have an adverse credit rating.
Credit reference agency reports
Knowledge of your credit report is
your right. Going about getting it requires a little research.
Here are the steps:
1. Obtain a useful booklet entitled
'No Credit?' from
The Office of the Data Protection
Commissioner,
Wycliffe House, Water Lane,
Wilmslow,
Cheshire SK9 5AF
Telephone: 01625 545745
email: mail@dataprotection.gov.uk
website:
http://www.dataprotection.gov.uk
2. You have a right to ask the credit
reference agencies for a copy of your file. Send £2,
your full name and address and any other addresses you have
lived at during the past 6 years to the agency.
The two main agencies are:
Equifax Plc, Credit File Advice Service,
PO Box 3001,
Glasgow G81 2DT, and;
Experian Ltd, Consumer Help Service, PO Box 8000,
Nottingham NG1 5GX.
Clearing judgement records
If a judgment debt is paid within
a month of it being granted, the judgment is cancelled and
all mention of it removed from court records and credit
reference files. But the history of the debt may not be
deleted from the credit reference files.
Judgments paid after one month can
be marked 'satisfied' by applying to the county court for
a Certificate of Satisfaction which will be passed by the
court to the credit reference agencies.
Correcting wrong records
If you think the information on your
credit reference file is incorrect you have a right to have
it corrected or removed. If you think that information on
a county court judgment is incorrect you should ask the
court for guidance on what you can do about it. If you think
other information is incorrect you should write to the credit
reference agency.
Beware the sharp operators — let UK Online help
you
Advertisements offering to 'clean
your credit reference file' or 'restore your credit rating'
by rubbing out a bad debt record, should be treated with
caution according to the Government's consumer protection
authority.
The Office of Fair Trading warns that
the information given by so called credit repair companies
may be wrong, misleading or guaranteed to get you into worse
trouble – and ensure that you are even more out of pocket.
They may also be a 'front' for a lender
or broker who is simply trying to sell you a loan.
Typically the companies say they can
remove unfavourable information, such as county court judgments,
from your credit files and give guidance on how to make
a successful application for credit. Often the advertisements
urge you to call a costly premium rate telephone line for
more information.
They do nothing you cannot do for
yourself, with the help of UK Online Finance's
network of reputable credit providers, and our online facility.
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