Getting over a Bad Credit Rating
Credit files on almost every
adult in the UK are kept by credit reference
agencies which supply
information about your credit
record to
lenders. If you have a bad credit rating
lenders do not have to tell you exactly why they have
turned
you
down,
but they should give you an indication of the reason,
such as information provided by a credit reference
agency.
No
matter how bad your past it is possible to recreate
a good
credit record.
It simply requires a well planned and well executed
campaign.
The campaign outlined below uses credit cards as
the primary weapons in overcoming a poor record,
as they
are relatively
easy to obtain. They must be used carefully. You can
vary this, using the same steps, for mortgages and
loans.
The steps
in this two year campaign avoid the need to tell
"fibs" on application forms ( a crime, by
the way) and will
help to overcome a bad credit
rating. They can be varied according to circumstance:
Credit Cards as the key
to a bad rating strategy
1. Get a credit reference
agency report on yourself to establish the scope of your problems
(see below).
2. Pay out any outstanding judgements.
3. Apply to those lenders so
moved, to provide you with a very small credit limit
on one of their basic cards, say £200. Click
on the button below to get a list of these.
4. Open a savings account and
apply for a bank based credit card, again asking for
a small credit limit amount, say £500.
5. Use these cards just shy of
the maximum, and pay them out before the billing period
for about six months. Keep
the
bank
account in positive balance, say £200
in credit, and make your card payments via that account.
6. At the end of six months
ask the bank to raise your credit limit to say £1000.
The other lender will generally contact you a month
or
so later
offering a higher limit.
7. At the end of the first
year apply to your banker for a small personal
loan, say £2000.
Pay it
according
to the terms, without fail.
8. At the end of the second year,
take out a mortgage, buy a car, go shopping. As long
as you do it within your means, you are away clear.
Start
building your credit card rating online
Click on this button to go to
our credit cards page and select "Yes" where
it asks if you have a bad credit history. We'll
find you
an adverse credit card provider who
will start rebuilding your credit
rating.
Mortgages for Adverse Credit
As with all credit rating renewal strategies, start
out by going through the steps above for a credit
card strategy, but instead of applying for cards, you're
looking for a mortgage. We do have lenders who
specialise in people with CCJs, arrears problems, or
no certification of salary level. If you are prepared
to pay for it, there are several companies who will
accommodate you for a mortgage, despite every setback
you can imagine.
You will need a deposit (in real money), and be
in a position to carry through the project for at least
seven years, at which time you can swap financiers
with no questions asked, and probably get better
terms.
The point is that a penalty rated mortgage (because
that's how it works) is a heavy way to fight back on
a credit rating. If you get it wrong you are worse
off than before.
On the positive side, however, if you are accepted
for a mortgage, then the providers of other forms of
credit (overdrafts, loans, credit cards) swiftly ignore
your past.
Get into a mortgage, even with a bad credit rating, online
You may think you've blown your mortgage prospects
for ever, but hold the phone! Click on this button,
fill in the form and who knows, you may look more like
Snow White than a Wicked Sister to some lender out
there . . . don't forget to tick any boxes that ask
you if you have an adverse rating. It will speed
the process up, no end.
Loans for poor Credit ratings
This is tough. You do all the steps as for credit
cards (above) but instead of asking for cards, you
apply to our lenders for an adverse credit personal
loan. Most of the risk lenders want property for collateral,
so if you don't hold a mortgage, it may be better
for you refer to the strategies above.
On the other hand, if you do hold a mortgage some of the high risk financiers are willing to look on it as being worth 125% of its value. So you just got an instant equity position to borrow against.
Applying for a loan online with a bad credit history
Even if you think your credit rating is so bad
you don't stack up for some high risk finance, it's
worth clicking on this button, filling in the form,
and checking out what comes back. If you get a string
of questions you'll be able to figure out where you
fall short, and do something about patching it up
. . . remember to tick any box that asks if you
have an adverse credit rating.
Credit reference agency reports
Knowledge of your credit report
is your right. Going about getting it requires a little
research. Here are the steps:
1. Obtain a useful booklet entitled
'No Credit?' from
The Office of the
Data Protection
Commissioner,
Wycliffe House, Water Lane,
Wilmslow,
Cheshire SK9 5AF
Telephone: 01625 545745
email: mail@dataprotection.gov.uk
website:
http://www.dataprotection.gov.uk
2. You have a right to ask the credit reference agencies
for a copy of your file. Send £2, your full name
and address and any other addresses you have lived
at during the past 6 years to the agency.
The two main
agencies are:
Equifax Plc, Credit File Advice
Service, PO Box 3001,
Glasgow G81 2DT, and;
Experian
Ltd, Consumer
Help Service, PO Box 8000,
Nottingham NG1 5GX.
Clearing judgement records
If a judgment debt is paid
within a month of it being granted, the judgment
is cancelled
and all
mention
of it removed from court records and credit
reference files. But the history of the debt
may not be
deleted from the credit reference files.
Judgments paid after one month
can be marked 'satisfied' by applying to the county
court
for a Certificate
of Satisfaction which will be passed by
the court to the
credit reference agencies.
Correcting wrong records
If you think the information
on your credit reference file is incorrect you
have a right to have it
corrected or removed. If you think
that information on a
county court judgment is incorrect
you should ask the court
for guidance on what you can do about
it. If you think other information is incorrect
you
should
write to
the credit reference agency.
Beware the sharp operators — let UK Online help you
Advertisements offering to 'clean
your credit reference file' or 'restore your credit
rating' by rubbing out a bad debt record, should be
treated with caution according to the Government's
consumer
protection
authority.
The Office of Fair Trading warns
that the information given by so called credit repair
companies may be wrong, misleading or guaranteed to
get you into worse trouble – and ensure that you are
even more out of pocket.
They may also be a 'front'
for a lender or broker who is simply trying to sell
you a loan.
Typically the companies say they
can remove unfavourable information, such as county
court judgments, from your credit files and
give guidance on how to make a successful application
for credit. Often the advertisements urge you to
call
a costly premium rate telephone line for more information.
They do nothing you cannot do
for yourself, with the help of UK Online Finance's network
of reputable credit providers, and our online facility.
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