A Guide To Boosting Your Credit Rating

Buying things on credit and borrowing money can be a pain for everyone, particularly those with poor credit ratings. Sometimes it can seem that you are losing the battle with your credit score, but do not despair. There are actions you can take to make your credit rating look better.

What Is a Credit Rating?

A credit rating is an estimate, based on a person's history of borrowing and repayment, that is used by creditors (banks or other businesses) to determine the maximum amount of credit it can extend to without the risk of losing money. Credit is generally high interest short-term borrowing which you need to pay back. If you do not pay it back in time you will receive a negative credit score and other companies will be able to see this. If you keep on top of your bills, your credit rating will look clean.

Boosting Your Credit Rating

However, there are ways to improve it if it isn’t looking too good. Firstly, make sure you keep it up to date. It seems logical but a lot of people do not do it. Your credit rating should always reflect your current circumstances, so be sure to update it when you make repayments. If there is something that needs challenging, do not be afraid to do it. If there are special circumstances, write them down next to the items in question – do not let them become a blot on your score.

Identity fraud is a fast growing crime and it is affecting lots of people. You must take all necessary steps to protect your identity. The moment you see something on your credit report that you do not recognise, contact your bank instantly.

Be sure that there is no-one on your credit report who should not be. Divorced individuals (for example) often carry the names of their ex-spouses long after the marriage ended. This can affect your credit rating, so be clear about your current circumstances.

Always ask for a quotation before you let the bank or building society check your credit. If lenders see a flurry of credit search applications they may view you are desperate for money and it could affect your rating.

It seems logical, but always pay your bills exactly when you are able to. Do not let debts pile up if you can help it, these have the most affect on your credit score.

Finally, avoid credit repair companies. These generally do not have the authority to amend your credit report and you will probably be tricked into paying for something you really do not need.