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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.

Credit Cards for Adverse Ratings

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.

Mortgages for Adverse Ratings

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.

Loans for adverse ratings

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,
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.

Copyright 2003 © UK Online Finance. Follow this link for legal information.
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