So Is There Anything You Can Actually Do To Improve A Damaged Credit Rating

Category: Finance, Credit.

Your credit rating is a vital factor in determining what kind of loan or credit card you can expect to receive, or indeed whether you have a chance of having an application approved at all.

Missing payments on loans or credit cards will leave a black mark on your credit file, thus lowering your credit rating, and defaulting on finance altogether will have an even worse effect. Unfortunately for many people, it is all to easy to cause damage to your credit rating either through financial misfortune such as losing your job, or perhaps more commonly, by building up debts in the naivety of youth which then become difficult if not impossible to repay in a timely manner. If you find yourself with a poor credit rating, you may be tempted by the advertisements you ll no doubt have seen plastered across the web which promise to rebuild your credit rating and solve all your credit problems at a stroke. Many of these schemes are at best dubious and unlikely to achieve the promised results, while others are at worst outright illegal as they advocate the use of fraudulent techniques to leave your old credit persona behind. Does this maybe sound too good to be true? So is there anything you can actually do to improve a damaged credit rating? There will be a small fee for this, but you have the legal right to see all the data which is held on it.

The first thing to do is to obtain a copy of your credit file from one of the major credit reference agencies. Check it over carefully to see if there are any small outstanding debts which you ve overlooked, and can be repaid without too much difficulty, removing these default notices from your file. If you find any such errors, and can prove that a mistake has been made, the credit reference agencies must by law correct the information. Also ensure that all the information on your file is correct and complete, paying special attention to any debts marked outstanding which you think you might, have cleared, in fact- it s far from unknown for a cleared debt not to be accurately reflected on your file, leaving your credit score worse than it really should be. Now that you ve cleared any overlooked debts and made sure that your file is up to date and correct, you need to start to take active measures to improve your rating. What you can do, is to add, however good information to balance the bad .

It is unfortunately impossible to remove genuinely adverse information from your file until it expires naturally, which can take up to seven years depending on the nature of the offence. The most effective way to do this is to take out a form of financial service which you are almost certain to be accepted for- a high APR credit card specifically aimed at people with poor credit is a good example. The trick is to make sure that this new product you take out reports your activity to the credit reference agencies. A no- frills bank account which allows no possibility of going into debt is another. Thus, by operating the account responsibly and not missing any repayments or otherwise getting into trouble again, you will slowly begin to build up the number of positives in your file. It s by no means a magic bullet and it requires time and patience, but slowly your credit score will begin to improve to the extent that you can consider applying for a more advanced form of credit, and steadily work your way back towards a neutral or even good credit rating.