A poor credit rating makes it more difficult to get approval for a loan, mortgage or credit card. You need to check your credit report for errors and take steps to improve your credit score. You cannot fix credit problems overnight, but you can improve your creditworthiness gradually over time. Paying your debts on time is only part of the solution.
Correction of mistakes in your credit report
Order your credit report for free
Under the Fair Credit Reporting Act, you are able to get hold of a copy of your credit report without charge. Your free credit report is available from Experian, Equifax and TransUnion once every 12 months at Annualcreditreport.com. You can either request them at the same time or order a copy from each agency once a quarter. Check for credit report mistakes
A surprising number of reports contain information that is not entirely accurate. The onus is on you to identify and correct these mistakes before you apply for credit. You just need to inform each credit reference agency and provide proof. It is advisable to send a copy of all documentation be registered post so you have proof of postage.
How to get a better credit score
Pay your debt and credit obligations punctually
The most effective source of bad credit help is paying your debts on time. The longer it has been since you last defaulted on a credit agreement, the easier it will be to get approval for credit. Use old credit and debit cards
Credit obligations that have been in place for longer have a greater weighting. If you have an old card which you have not used in a while, use it to make a few purchases each month. Closing down old accounts will lead to a credit score drop. Interest-free balance transfer deals
Transferring your balance to an 0% deal may save you money, but it could hurt your credit rating. Only transfer your debt to a card that has a higher or similar credit limit so that you do not hurt your credit utilisation figures. Don't make too many credit applications
Each time you apply for a loan, mortgage or credit card, it is recorded by credit reference agencies for 24 months. Too many applications within a relatively short time frame will hurt your credit. Only apply for credit when you meet the eligibility criteria. Lenders and issuers are able to see all of your searches when you apply for them.