Ways to Protect The Credit Rating
Thursday, March 19, 2009 11:39
Your credit score is your own personal financial history. It can tell financial institutions how you conduct yoru bank accounts, credit cards, movile phones and more importantly how credit worthy you are. As credit is almost an essential part of today’s lifestyles, protecting and improving your credit score has never been more important. So what can you do to improve your credit rating?
1. Check and Understand
If you don’t know what your credit rating is then you won’t understand it. Make sure you check your report at least once a year or if your situation changes. There are lots of websites which can be of some help for you to understand.
2. Make Amendments
If you find anything unexpected in your report write to the credit agency and ask for it to be amended or investigated. Even minor errors can cost future credit opportunities. If there are special circumstances around a particular entry such as missed payments due to illness etc. then you can often add a short note called a Notice of Correction. Lenders must read any Notice of Corrections, that has been added but don’t have to take it into consideration when making credit decisions. If you have settled any County Court Judgements or your bankruptcy has ended make sure this is showing on your record.
3. Register Your Interest
If you are not on the electoral roll then you have less chance of getting credit decisions. Being able to track you to a registered address is an important factor for financial companies.
4. Pay on Time
Making payments on time is very important no matter how big or small they are. If you have any problems making payments then you must contact the company immediately. Often they can assist you with ‘temporary blips’ and discussing options and keeping them informed can reduce the the damage to your credit score.
5. Check Your Identity
If you notice anything unusaual or unexplained on your credit report such as applications you didn’t make then you may be a victim of identity fraud. Always check that you can account for all of your credit ‘footprints’.
6. Keep the Record Straight
Your credit report includes a section listing anybody you have a joint account, mortgage, loan or credit card with. Lenders may take a look at the financial histories of these people when you apply for a new loan. If they have a poor credit record, you could be rejected.
If you no longer share a joint financial agreement, advise the credit agency who can remove the financial connection from your credit report.
7. Reduce Your Footprint
Several applications within a short period of time will show up on your credit report. If you want to shop around for credit, ask the companies for a quotation before making a formal application. If the company needs to check your credit report to give you a quotation, make sure it only makes a quotation search. Lenders may interpret an abnormal number of credit application searches as indicating that you have applied for an unmanageable level of credit. They may even suspect fraud.
8. Tell the Truth
Always tell the truth on your applications. Lenders can find out quite easily if you have lied and this will cause difficulties in future applications for credit. It may even be deemed as a fraudulent application.
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