How to improve credit rating

A bad credit rating can seriously limit the opportunity of obtaining credit with normal to low interest rates. This articles looks at easy ways to improve a credit rating to a level that will be looked on favourably by lenders.

Easy ways to improve a credit rating

Credit ratings are used by lenders to assess an a credit applicant's risk factor. If an applicant has a poor credit score, they may still be offered credit but the interest rates will be higher than normal. Personal report
Improving a credit rating can begin by obtaining a copy of a personal credit report. From this report, consumers can view the improvements that should be made to improve their credit rating. Registration
Consumers should ensure that their identity is easily verifiable. This means ensuring that they are registered on the electoral role. Lenders always use the electoral role as a way of checking an applicant's identity. Updating the report
The next step should be to check the credit report for out of date information such as cleared debts that are still showing as outstanding on the credit report. Consumers should contact either their previous creditors or the credit reference agency to have these outdated notifcations removed from the report. Author's advice
Always make sure that identification details such as home address and other contact details are updated on a credit report. Consumers can usually check credit reports free of charge for the first month through the three major credit reference agencies.

Take steps to improve credit rating

Consumers with poor credit ratings can improve their credit score by obtaining one of the many adverse credit cards available. Adverse credit cards Adverse credit cards
These come with high interest rates but are the ideal way to rebuild credit ratings. By making purchases on these credit cards and repaying consistently on time every month, the credit score will begin to improve. Consumers can also repay the debt within the interest free period and this will mean that goods purchased will be interest free. Obtaining one of the many department store cards is another good way to rebuild a credit rating. Another method to improve a credit rating is to obtain a mobile phone contract. There are mobile phone contracts available for customers with bad credit ratings, and if the customer does not miss the monthly repayments the credit rating will improve. Customers using adverse credit cards and mobile phone contracts as a way of rebuilding a credit rating should ensure that monthly repayments are never missed. It only takes one missed or late monthly payment for a bad credit notification to be marked down on a report. Final word
Using any of these credit building methods should help to improve a lender's credit approval decision.