A bad credit rating can be repaired, although you cannot mend those ratings overnight. Check your credit score and know your credit history as that will help you in identifying the factors responsible for your bad credit rating.
Credit score rating: The facts
Five parameters determine the credit score of an individual. These include an individual’s credit history, types of credit presently used, new credits requested, period of credit history, sum of money associated with your outstanding debt and the history of your payments. To get a better credit score, you need to primarily focus on improving your payment history and clearing your outstanding debt. Applying for a loan When you apply for a loan, the bank or financial lending institution will check your credit report to know more about your credit history. It will obtain three credit scores and three credit reports from the three important credit reporting agencies in the UK. Thus, to know more about your score credit, get in touch with the three credit reporting agencies: Transunion, Equifax, and Experian. You may also ask your bank or lending agency about the credit scores used to process your loan application.
Ways to improve your credit scores
Paying your credit bills To improve your credit score, ensure that you improve your payment history. Thus, you now need to pay your credit bills within the due date. In case of payments associated with minimum balance, you still need to pay within the stipulated time period. You need to improve your mortgage credit by paying all bills pertaining to mortgages on time. Moreover, ensure that you do not fail to pay your household bills of phone and utilities on time. Skipping payments will badly impact your credit score. Improving your credit score To improve your credit score, ensure that you maintain the ratio of debt to available spending at a minimum. If you have used all the available credit of your credit cards and have been denied new credit cards, then it will severely hamper your credit score. In other words, you need to contain the amount of outstanding debt to a minimum value. This will surely improve your credit score.
Overall credit management in a snapshot
Thus, to improve your credit score, ensure that you really manage well your overall credit. If you are a regular user of credit cards, personal loans, and mortgages, ensure that you pay off the credit regularly within the stipulated period. Do not use the maximum available credit of your credit cards or skip the payments. This will severely hamper your chances of improving your credit score.