Step two: Stop applying for credit you won't get
You may not be aware of this, but every time you apply for credit the ensuing credit search is noted on your credit report. If you have applied and been rejected several times, your credit history may be getting worse and worse. Therefore, stop applying and check your credit rating first so you can start to improve it and avoid getting rejected again.Step three: Check your credit report
This will show you the areas that you can improve on and also means you can check for any errors that might be on your report and get them changed. Even a simple mistake such as a wrong present or past address can lead to you being judged on someone else's credit history. If you do spot a mistake, just write to the agency you obtained your report from and request it's changed.You may be able to obtain a copy of your credit report for free from Credit Expert
Step four: Create some positive credit history
1.Open a higher interest credit card for which you are more likely to be accepted. Make sure you manage it properly to help rebuild your credit rating. This means repaying every month in full, spending a little each month for six to twelve months. For most credit cards, this method will only work if you just use your credit card for purchases. It is important to make sure you make your payments on time and stay within your credit limit or otherwise it will have a negative effect on your credit rating.Here are some examples of higher interest cards:
-The aqua Card: Typical 35.9% APR variable and up to 51 days interest free credit on purchases if you pay off your balance in full and on time each month
-The Capital One Classic: Typical 34.9% APR variable
-The Barclaycard Initial: Typical 27.9% APR variable
2.Put bills in your name (where possible) and pay them by direct debit.
3.Open a couple of store cards as these are usually also easier to get than standard rate credit cards, but ALWAYS pay them off in full every month and you’ve got another way to show you can handle your finances responsibly. Don’t use this method if you are bad at managing your finances as missing payments on store cards may have a negative impact on your credit rating, the opposite of what you’re trying to achieve by using them.
Step five: Pay your bills by direct debit
This ensures you can’t forget to make your payments on time, which is important because every missed payment will show up on your credit report and have a negative impact on your credit rating. However, make sure you always have enough funds in the account you have set up the direct debit for, as letting that account go into unarranged overdraft when your direct debit is paid out will have the opposite effect on your credit rating!Step six: Close down old accounts and cards
Having too much credit available to you may have a negative impact on your credit rating and lenders look at the total amount available to you, not just what you owe. To avoid this, close any cards or accounts that you are no longer using and only leave open the active ones.Step seven: Dealing with County Court Judgments (CCJ's)
This will only apply to those who have had one or more CCJ’s registered against them. If this is the case and you paid the amount in full within 28 days of the claim being made, then the judgment will have been cancelled and shouldn't appear on your credit record. Alternatively, if you paid the full amount at a later date, you should obtain a letter of confirmation from whoever filed the judgment and deliver it to the County Court. Once the Court has verified the debt has been paid in full, you can ask them to issue you with a certificate of satisfaction or cancellation, which will involve a court fee. Your record will then show the debt as satisfied and this will remain there for a period of 6 calendar years after the judgment order.Step eight: Notice of CorrectionYou can add a Notice of Correction to your report to highlight any mistakes you have found, but that a credit agency has refused to amend. Another application of this is to indicate a reason for getting behind on payments due to a change of circumstance in your life, such as divorce or redundancy.
Having a Notice of Correction on your report means your application for credit may take longer as the lender will be obliged under the Guide to Credit Scoring to read any Notices of Correction. Therefore, think carefully before you request to have one added to your report.
Step nine: Curb your card spendingThis is the most obvious step of all, try to minimise any debt on your cards. As a rule of thumb, you should try to keep the debt on a card under 30% of your credit limit.
Step ten: Time your applications wisely
Applying for lots of credit in a short space of time and being rejected is not good for your credit rating. You can try leaving between 3 and 6 months between applications to help repair your credit rating, but it may take longer. Things such as mobile phone contracts and car insurance can also count towards this.
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