If you can’t pay your debts, missed payments and CCJ’s will both have a negative impact on your credit rating. This can make it difficult to get credit in the future. However, a poor credit rating is not set in stone. There are things you can do to improve it and increases your future chances of successfully applying for mobile phone contracts, loans and mortgages.
Check your credit file
The first step towards improving your credit rating is to access your credit file and check for any errors. Something as simple as having an incorrect address listed on your file can affect your score.
You should also check for fraudulent activity. If someone has applied for credit without your knowledge, this will appear on your credit file.
Check your financial links
It is not a good idea to share a bank account with a spouse or family member if they have a bad credit rating. This will also affect your score. Remove yourself from any such accounts and open an independent bank account.
Make payments on time
Make sure you don’t miss payments or make late payments on things such as television subscriptions, mobile phone contracts and internet services. This proves that you are capable of managing your finances.
Make small purchases on low-interest credit cards
Apply for a credit card and use it solely to make small purchases that you can afford to pay back at the end of the month. Some credit card companies accept applications from people who usually struggle to get credit.
Regularly paying off the full balance on a credit card will give your rating a positive boost. Just make sure you only use it for small purchases so that you can afford to pay it all back when the bill comes through. Don’t be tempted to use it for anything else!
A CCJ or ‘County Court Judgement’ on your file is probably the quickest way to lower your credit rating to a point where it’s difficult to resolve. If you are struggling to make debt repayments, look into getting help or debt advice before the situation escalates that far. If you can’t pay your credit card bills and you have already missed more than one payment, CLICK HERE for advice.