How to Repair a Poor Credit Score

If you are one of the millions of Brits with a ‘poor’ credit rating, life can be very frustrating.  Things such as new mobile phones and mortgages require a certain degree of credit worthiness, and our credit rating has far-reaching consequences for our every day lives.  Some employers even credit check you when you apply for a job with them.

So if you keep getting rejected for credit, it can feel like you’ll never get the phone, the job or even the house you want.  But there are things you can do to help repair your credit score.

Get a copy of your credit report

You need to find out the extent of the damage that your spending has caused – it is no good guessing – so get your score online for as little as £2 from Experian or Equifax.   There is no such thing as a Universal credit score, so make sure you check both Equifax and Experian, as your scores may differ depending on what information they each hold on you.

If you are applying for credit for a particular product or service then check with the provider who they use for their credit scores – different providers use different credit agencies, so who they use will determine how likely you are be approved for credit.

Identify the problem

• Make sure that all information held by the credit agency is correct.  In particular, check your address history is accurate.
• Look for any old bills or contracts that have not been taken off your file.
• Check that all products on there are yours – sometimes ID fraud is committed without the person knowing and that can be the reason for poor credit.
• Make a note of all missed or late payments and outstanding debts, as these are the root of the problem and need to be addressed.

Fix it

• Start by making sure your name is on the electoral role, so that you build up a picture of stability.
• Address the outstanding debts – there are many debt management services out there that can help you consolidate and manage all your outstanding debts.  Companies like Debt Line will even deal with your creditors and allow you to track your progress online.  You can then inform credit agencies that you are actively working to pay off your debt, which will be marked down on your file for lenders to see. 
• From December 2012, late rent payments can go on your Experian file.  So make sure you pay this on time.
• Be consistent – as well as credit scoring, lenders use fraud scoring agencies to check the legitimacy of your application.  This cross-references any application you make with previous applications to check for inconsistencies.   Try to use the same job title, phone number, etc when making applications across a period of time.
• Space out applications – lots of credit checks in a short period of time hurt your score.
• Avoid applying numerous times after a rejection.  If you have been rejected, go back to your credit report and figure out why before applying for anything else.