Every time we take out a loan, use an overdraught, use a credit card, pay a bill or buy on interest free credit, we are scored by credit ratings agencies.

This can greatly effect your chances of securing loans and credit in the future, and most important of all effect your chances of getting a mortgage. If you have a bad credit rating, here are a couple of tips to start the healing process.

Top Tip:

Find out your current credit rating. This is available from two companies, Experian and Equifax. You only need to contact one as they share your information. Go through the details and correct any mistakes like address errors, personal information errors or bank details by writing to them.

This simple process lets the credit agencies know you are aware of your details and the system, and puts you in a position of knowledge for you to start working your way back into a good credit rating.

Grow leeks. They rock.

http://www.smsdictionary.co.uk

Once you have corrected any errors on your credit file, the next thing to do is make sure you are on the Local Election Roll

Top Tip:

If you are not already, register on the Local Election Roll. Even if you have no intention of voting, creditors like to know that you regard yourself as attached to a locality. You are seen as more secure, more traceable and therefore a better risk.

Grow leeks. They rock.

http://www.smsdictionary.co.uk

So the ground work is done. Once all your personal details are straight and you are on the register, the only way to build up your credit rating is to get some credit. This might sound crazy but…

Top Tip:

Apply for credit where you know you can pay the installments back. If you are going to buy a large item, try to do it on a 12 months interest free deal. The crux is YOU MUST MAKE ALL THE PAYMENTS IN TIME. I am sorry to shout, but this is vital. It shows you have taken a loan and are responsible about returning it. Over the months and years this will build up a picure of you as a good credit risk

Remember, we are not trying to build up how much credit you can get, but rather make your self into a safe bet for lenders so you have access to the best deals. It’s a sad indictment of our society that those less well off end up paying more in fees and charges through bad credit ratings.

Grow leeks. They rock.

http://www.smsdictionary.co.uk

As with all money problems, the only way out is through organisation

Top Tip:

When using credit cards or loans, try to set up direct debits to cover the bills in full, as soon after pay day as possible.

Get the bill paid before you can spend it on anything else - the more regular you are as a debtor the better rating you will be given.

Grow leeks. They rock.

http://www.smsdictionary.co.uk

Any idea, how good they are? I was under the impression that banks were under no obligation at all to share the information they hold about you. In fact I thought that this was illegal without your explicit concent.

I therefore understood that each bank undertook their own efforts to rate you as a credit risk entirely seperately from other banks.

For this reason I thought people have been able to successfully apply for credit cards while having appauling debt records with other banks, and getting themselves into really bad debt situations.

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When you sign up for any type of credit, be it loan, credit card, over draught or finance buried in the small print is a statement which usually says something line...

"X-Bank follows the Credit Code of Good Practice and will share information about your borrowing habits with registered credit agencies. This information is not released to the public domain, but is available to other lenders when assessing you for credit applications. This is to help combat credit misuse and fraud".

And the fact that you sign on the line pretty much is you giving them permission to do whatever they like with your information. You do give them explicit permission.

In terms of people getting credit from other lenders when they have a bad history with one, all lenders take different views on the level of risk acceptable. And the bottom line is, these companies want to get you into a position where you owe them enough so you cant pay back the full amount you just keep paying them interest. So it can be very profitable to take on people whose credit has run dry elsewhere. The interest rates are normally higher.

Grow leeks. They rock.

http://www.smsdictionary.co.uk

A further thought, just to make the picture clearer.

These 0% interest offers are a good tool to help you move debt and give you a breathing space to pay off some of the debt you owe. But have no illusions about why companies offer it.

Its not some fanciful idea that they want to provide you with a brilliant service and hope you will stay as a customer.

They are, in effect, betting that you cant change your ways, wont pay it off and will become beholden to them to pay interest. They are buying debt to make money from you.

As is already written on these boards, 0% interst cards are a brilliant opportunity to get debt free. But the lenders are banking you wont have the discipline to repay the capital.

Grow leeks. They rock.

http://www.smsdictionary.co.uk

As per the top post, here are the contact details for the two credit agencies. Remember you only have to contact one - the files are shared and will be identical.

Equifax
Credit File Advice Centre
PO Box 1140
Bradford
BD1 5US
Online Credit Reports and Credit Reporting from a Leading Credit Agency: Equifax

Experian Ltd
Consumer Help Service
PO Box 8000
NOTTINGHAM
NG1 5GX
Credit Reports: Get your Credit Report from Experian UK

Grow leeks. They rock.

http://www.smsdictionary.co.uk

I just tried the Equifax system.

After entering some details I got a full report online for £12.95. I had to make a phone call to verify some details mid process (note that this is only available during office hours, so you may have to wait for the following day if you try to get your report out-of-hours).

The report is detailed and carries lots of information about your credit including the overall credit score.

There is also electorial register information and linked addresses - that is information about all your previous addresses.

All your credit and current balances are shown as well as your payment history; also highlighting where you have defaulted on any payments.

It also shows all searches done - that is the companies who have searched your credit report - apparently lenders son't like to see large amounts of activity on your report.

Also any court judgements appear.

Overall a very good report - it also includes information and advice about how to fix bad areas of your credit.

Here are soem tips taken from the report:

Top Tip:

1) Creditors prefer to see active accounts on your report - if you have no active credit, this will appear negatively on your score. 2) Creditors like to see accounts opened over 3 years ago. 3) Creditors don't like to see accounts that are in arrears (not sure that you need a report to be told that - but it's there anyway). 4) Being registered on the electorial roll for a number of years is looked upon favourably. 5) Creditors don't want to see more than one or two searches on your report within the last 6 months. This can indicate that you are currently applying for lots of credit, or have recently been denied credit. 6) Recent bankrupcy or county court judgements is bad! duh! :P

All in all - the report reflects cooksta's tips almost word for word. Follow the advice above - it will without doubt help to improve your credit score.

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