Repair Your Credit Rating

Improve your credit score

For individuals who have been refused credit due to a low credit score there are steps which can be taken to try and improve their credit rating.

The first, and simplest, is to check the credit files held by the credit reference agencies. Between them, Experian and Equifax carry out most of the credit reference searches in the UK. There is a simple procedure for asking for your details and  this is well worth doing, as mistakes do occur.

Assuming there are no mistakes on your credit file, the next step is to check that your other records are up to date. Some lenders are reluctant to grant credit to someone who is not on the electoral roll. The government recently changed the rules to allow rolling registration, so there is no need to wait to receive an electoral registration form.

Simple steps such as putting the phone line in the applicant's name and checking that all credit card companies and other lenders have your correct address can help. Beyond this, however, it becomes rather harder to improve your credit score.

Rebuild credit history

There are some well established companies that offer credit cards to people with a low credit score and offer these individuals the opportunity to rebuild their credit history. 

Capital One offers a special credit card for people with past problems. Established and reputable lenders will charge more interest to credit impaired customers than to people with a good history, but they will not charge the extortionate rates offered by some less well known companies. 

However if you pay the monthly payments on time, this will help you rebuild or strengthen your credit rating and in time you'll be able to revert to a credit card with a more competitive rate of interest. 

Card Typical APR
(variable)
 
Aquis
Whether you’re new to credit or have had a few credit issues lately, get back on track with an Aquis Visa Card.* Credit is provided by Vanquis Bank Limited subject to status
29.8% Details / Apply
Vanquis Visa
Suitable for people new to credit or people with a poor credit record, start with an easy to manage credit limit and build your credit with a Vanquis credit card.* Credit is provided by Vanquis Bank Limited subject to status
39.9% Details / Apply


Avoid credit repair companies

There is one group of companies, however, that all the experts say are best avoided. These are the so-called credit repair companies. These companies promise to fix problems with clients' credit histories, and they charge for doing so.

According to the credit reference agencies, these operators rarely do anything that borrowers cannot do for themselves. In fact, they can make matters worse. Experian, the credit reference agency, states that it "...considers the claims made by credit-repair companies to be bogus".

Malcolm Hurlston, from the Consumer Credit Counselling Service, agrees. "Credit repair companies are expensive and generally useless," he says. "There is a minor possibility that there is a genuine mistake on your credit file." This, though, is something that borrowers can fix themselves, at very little cost.

For people with genuine credit problems, the best first point of call is either a helpline such as the Consumer Credit Counselling Service, or a trained money adviser. Money advisers operate via Citizens' Advice Bureaux and will help clients put their financial affairs in order, and agree a manageable debt-repayment schedule if necessary.

Check your credit file

The three main credit reference agencies are Callcredit, Experian and Equifax. If you apply for a credit card, the credit card company will almost always carry out a credit check with one of the agencies.

The agencies are obliged to give consumers copies of the information they hold. There is a statutory charge of £2 for this. You will need to give the agency addresses for the last six years, as well as your full name.

Click here to sign up for your FREE Experian credit report and 30 day free trial of the CreditExpert Monitoring Service.

Callcredit plc,
One Park Lane,
Leeds.
West Yorkshire.
LS3 1EP.

Equifax
Credit File Advice Centre
PO Box 1140
Bradford
Experian Ltd 
Consumer Help Service 
PO Box 8000 
NOTTINGHAM
NG1 5GX