Credit and Finance Articles
Credit Repair
With credit now more difficult to obtain as a result of the pull out of a
numbers of lenders, ensuring that you get the best possible rating for
your credit history is vital if you want to apply for a loan or other
services that may involve some form of credit (such as a mobile phone
contract).
The first thing to do is get hold of the current copy of your credit
report. This is used by most lenders and service providers to assess the
risk they believe they will have in getting their money back. The
information in a credit report is used as the basis for many of the credit
scoring systems that they use to help judge whether to lend or
not.
Credit reports can be obtained free from any of the main bureau company`s
such as Experian or Equifax. Whilst this can be obtained free of charge
(except for a nominal £2 administration fee), most companies will offer
you a free report which in enhanced and affords the opportunity to upgrade
to other of their services at a later date. Credit reports supplied in
this standardised format are easier to read and understand. Once you have
your report, read it carefully to look for any errors or mistakes. These
can be rectified by contacting the reference company and providing proof
that the entry is wrong. It may also be the case that some CCJ`s have
expired and yet are still showing on your file. It may also be the case
that there are CCJ`s showing about which you genuinely knew nothing. In
this case, you will have to apply to the court to prove that you did not
receive the summons.
If you have recently emerged from an Individual Voluntary Arrangement
(IVA) then you should receive a completion letter. A copy of this should
be sent to you plan manager who will make sure that the credit reference
file is updated by each creditor.
On the positive side, lenders are much more interested in how you have
acted in the last couple of years rather than further back in history.
Therefore, as you get credit and pay satisfactorily, the weighting
accredited to the recent activity will bring your score up to more
acceptable levels. In the meantime, there are specialist lenders who cater
for the poor credit risk market - although expect to pay a higher interest
rate until your credit score gets better.
To get any credit you must hold down a regular job with a wage. Lenders
will look to see that any bills you have are below 35% of your income
and/or loan repayments are below 20% of income. This ensures that you have
enough free cash to service their
debt. Provided you are able to satisfy this simple test, even with a poor
credit rating you should be able to get a loan. Your credit score will
improve over time as you gain a satisfactory payment history.
