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Turn around your credit rating
Your credit rating is a score that's given to
you based on your financial history. Your credit rating report is
the document that all lenders check before they decide whether to
lend money to you or not. If your credit rating is low, then you're
likely to get rejected when you want to borrow money, or apply for
credit.
What affects my credit rating?
A credit report will show payment profiles of
current commitments for the last twelve months, applications made
in the last twelve months, County Court Judgements and defaults
in the last six years and bankruptcy for the last ten years. It
will not show any mortgages repaid more than 12 months ago or missed
mortgage payments from more than 12 months ago.
All these factors go to make up your credit rating
- and it is this report that lenders base their judgement on when
they have been asked to lend money to you or give credit.
I didn't realise my credit rating was bad
Most people don't think about their credit rating
until they are turned down for something. If this happens to you,
then the first thing you should do is obtain a copy of your credit
report. You can do this cheaply by applying to the UK's two main
credit rating companies, Equifax and Experian. There are other credit
agencies, and each of them uses a slightly different method of calculating
your credit rating, but these two are the ones to approach to start
off with. Once you have your credit report, you can see exactly
what the lenders see and then you can start to address the problems:
-
Mistakes - there may be a mistake in
your report. If you can show that there is a real error, you
can add a note to the report to correct it.
-
Missed payments - if you have missed
payments on your mortgage, but have later caught up or made
an arrangement with your lender, see if you can add a note to
your report so that other lenders can see that you have taken
responsibility for your finances.
-
Credit and store cards - it's easy
to get out of your depth with credit and store cards. They are
easily available and well-marketed. You can end up with debts
on several cards and all that information is recorded. Try to
cut down the number of cards you are using, or stop using them
altogether, switching the debt to a single card that you can
afford to pay. Always look to switch to a credit card that will
give a low or 0% rate for balance transfers.
-
Credit applications - every application
you make for credit is noted. Every time you are rejected, a
note is added to your file. The higher the number of applications
and rejections, the more likely you are to be refused by the
next lender. Stop applying for loans and credit cards immediately
and look for a different solution.
Leybridge Limited can help you to turn around
your credit rating. Don't expect overnight success, because it takes
time for good payments to register on your records. For example,
if you need to buy a home, a specialist, experienced advisor from
Leybridge Limited can find a product to suit you, and who will help
you to start managing your finances.
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