Part 3: Treatment

We have visited all the credit rating resource websites to bring you a collection of all the things you can do to improve your credit file. We'll continue to add to this page, so please do check back often.

Contact a Debt Advice Charity

The first step for anyone looking to repair their credit rating is to get some expert, independent advice from a non-profit company. These companies are happy to provide help on how to manage your finances, deal with any existing debts, and assist with any concerns you may have over how to improve your credit file.

You can view a full list of companies that can help at the Credit Clinic Resources page.

Check your credit file often

It's important to look at your credit file to see what might be causing you problems, if any. The Causes page could give you some idea on what to look out for. Once you identify what may be affecting your credit file negatively, you can resolve these issues quickly and begin to repair a Bad or Poor credit rating. Ideally you want to check your credit rating before any major application or at least once a year. 

Always check after a failed application

If you've been refused credit, it's important to check your file for any obvious errors that may have caused your application to fail. The easiest way to repair a Bad credit rating is by knowing the problem. If you have an application for credit refused, it's an obligation for the lender to give a reason why. Any information you can find out will help fix your Bad credit rating.

Don’t apply too often

Every time you apply for credit, a note is left on your file that a company has checked your details. If you apply many times over a short period, the next time a company checks your file they'll see this. Why is this a concern? Because a large number of checks on your file may make you seem desperate for credit, and someone who's desperate is not reliable. Additionally, a refusal for credit will stay on your file for six years so it's important to be careful.  
Please note that applying to Creditplus to get an instant decision on whether car finance will be suitable for you doesn't leave a footprint on your credit file. A mark will only be left if we find you a suitable lender and you agree to their terms. Find out more by reading our Ethical Lending policy.

Time your application right

Without an IVA it takes six years for CCJs and bankruptcies to disappear from your credit file. So if you have any of these on your file, it's better to wait until they've disappeared before applying. It means playing the long game, but it'll help improve your credit file and save you money in the long run. It also gives you time to manage your finances and find some stability before taking steps to improve your credit file. We have a number of questions relating to credit history and car finance within our Help and Advice Centre. You can view the most popular Question and Answers on credit history here.

Check your eligibility before applying

Before you apply for finance, it's important to check that you've done everything you can to make sure you have the right profile for the product. It's better to do your research and not apply, instead of applying only to be refused. There are many websites with information on how to check; visit the Credit Clinic Resources page for more details. 

Join the Electoral Roll

One of the most important aspects of your credit file is the ability to trace your history, in particular your address history. The easiest way for companies to do this is by viewing the Electoral Roll to see where you've lived over the past five years. If you're not on the Electoral Roll, it can be a warning sign to creditors, so joining it is an easy way to improve your credit file.

You can register to vote online at: www.gov.uk/register-to-vote

Check addresses

In addition to joining the Electoral Roll, you should also go through any existing financial agreements and make sure the addresses are up to date. This will make it easier for companies checking your file to see how up to date you are with your financial documents. The idea is to make your credit history as easy to trace as possible.

Make sure it's just your finances being assessed

Whether it’s a housemate or an ex-partner, make sure that your finances aren't being affected by their Bad credit rating. When your rating is assessed, any shared accounts or finance agreements will also be checked, meaning the other party will also have their credit file looked at.

If you share energy bills or a bank account with your housemate, they can have their credit file checked if you apply for any finance. It should only happen if they know you are a couple, so be clear on any energy bill accounts the exact nature of the relationship between you and your housemate.

A partner can also negatively affect your credit rating. If you share any bank account, mortgage or loan with them it will affect your credit score. It might be worthwhile finding out their credit history before you begin sharing finances. If you don’t do it, a credit provider will.

Items that are currently examined across both parties are:

  •          Bank accounts
  •          Mortgages
  •          Loans
  •          Energy bills

If you split up with your partner, make sure you delink your finances as soon as possible. Either maliciously or innocently, they can affect your credit file if you're still sharing a financial agreement with them.

Cut down on any existing debt

It may seem obvious, but this is an important way to improve your credit rating. If you can show you have reduced debt, or even less debt on your file, a creditor is more likely to accept your application.

Avoid payday lenders

Using a payday lender is a sign of poor money management to credit companies. Try to avoid using them as much as possible to improve your credit file.

Cancel any unused cards

If you have a store card or credit card that you no longer use, it may still appear on your credit file. Because you will have some credit available on these cards, potential lenders will be unwilling to lend as there is greater potential for you to get into too much debt to pay your bills. So cancel any unused cards as soon as possible.

Look for any unfair defaults

Go through your credit history and find any defaults that were incorrect or unfair. It takes a lot of work, but if you can get the previous lender to remove them from your file, it will improve your credit score.

Use credit cards wisely

You may want to consider using a credit repair card to make small payments which you immediately pay back. By showing you can meet your monthly payments and write off the debt, you will be able to prove yourself as a safe prospect to lenders. The best card to use for this is a 0% interest rate card. Using a credit card to withdraw cash is unwise for a number of reasons. Firstly, it will be charged at a higher interest rate than spending with the card. Secondly, it's a sign that you're not good with your finances if you use a credit card rather than a regular debit card.

Make sure you pay your minimum payments

At the end of each month, make sure you pay the minimum payments stated in any finance contract every time. Any missed payments will incur a higher level of interest, so not only are you paying more money, but you'll also be leaving a negative note on your credit file. Before obtaining car finance we do encourage our customers to run through our car loan affordability calculator, to consider what monthly payment they can afford.  Monthly payment prices on vehicles are featured across our website. 

What now?

These are just some methods you can use to repair your Bad credit rating. It's not a quick process and will require time and commitment to get right. But taking these steps to improve your credit score will save you money and open up more credit options to you. Remember, if you want to find professional and impartial advice, you can find a list of useful contacts at our Resources page. You can also go check what can cause a Bad credit rating in our Causes section.

Let us know how you've improved your credit score

We love a success story here at Creditplus, so if you’ve had success with improving your credit rating, please let us know! To make this Credit Clinic the best it can be we are also keen to hear about any credit resources you would recommend. Contact us here.