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15 Tips on how to clean up your Credit Record

If you are having debt problems then there is a very good chance that these problems could do more than simply cause you a headache for the short term. For some time in the future you may also have to contend with your problems being listed on your credit record. Your debts could have a negative effect on your life for a long time to come, even long after you have paid them all off.

This can be quite an issue for us. This credit record is used by lenders when we apply to take out loans and to open up credit accounts with them, for example. So, if our previous debt problems appear here then they could last long into the future and they could help convince a lender that we just aren’t a good risk for them.

Although you cannot have negatives removed from your credit record just because they don’t suit you, there are some measures that you can take to make sure that your credit record is as clean as possible. This is all about accentuating the positives which will give you a better chance of overcoming any negatives that may show up on your record. Let’s see what you need to do.
  1. Check your details are up to date and accurate. If mistakes have been made then ask the credit reference agency to change them. Simple things like having incorrect address details and the wrong phone number can have a negative impact.

  2. Make sure you’re listed on the electoral roll and that this fact is shown on your credit record. This may seem like a small thing but it matters a LOT to lenders doing credit checks. It is, for example, the easiest way for them to check your identity.

  3. Close down old credit products that you no longer use. Lenders don’t like to see people with a lot of products at once, even if they don’t use them and haven’t done so for a long time.

  4. Make your debt payments on time every month. If you aren’t naturally organised then set up a direct debit to do it for you. Late payments do not go down well with lenders.

  5. Make at least your minimum payment. Make sure you meet your obligations to your debts to the letter. If possible try to overpay where you can.

  6. Do not skip payments. Missed payments are also not viewed positively by lenders. They’ll show up a big negative black mark on your record.

  7. If you have missed payments or made some late ones then you need to build up a few months of exemplary behaviour here to show that you are back on the right track.

  8. Check that there are no financial errors listed on your record (i.e. accounts not marked as settled when they are, payments marked as late when they weren’t and so on). If there are mistakes here then you can apply to the credit reference agency direct to have them changed.

  9. If you are unable to have something removed from your account – say, for example, that your lender does not agree that they have made a mistake – then you can ask the credit reference agency if you can post a statement to your account that will give your side of events. You’ll usually be given a maximum limit of 200 words here.

  10. Check to see who has done a credit search on your record in recent months. If you do not recognise some of the companies here then ask for them to be removed. Lenders will be keen not to see too much activity here.

  11. If you have any financial associates listed on your credit record that shouldn’t be there then have them removed. For example, this section of your record lists people to whom you have a financial connection. If you are married and have a joint mortgage then your spouse will appear on your credit record and you will appear on theirs. If you have recently split from a partner and/or they have their own debt problems then you may want to have them removed from your record. Do bear in mind that you cannot do this if you share liability for a credit or financial product.

  12. Don’t make any applications for credit unless you’re 100% convinced you want to go ahead (and will get approval). Every time you apply for a financial product like a loan or a credit card your application will show up in your credit record in some way or other. If you are turned down then this will put off other lenders you may approach later. Even if you make a few applications but then never take them up this can have a negative effect – making multiple applications for credit in a short space of time looks either fraudulent or desperate to lenders so you need to take care here.

  13. If you have a lot of listed debts try and cut them down. Lenders don’t like to see people with a load of different loans and credit cards. It makes them think that there is a financial problem. So, if you can, pay off and close down some of your accounts/loans. If this isn’t feasible for you right now then consider consolidating your debts.

  14. Check your credit report on a regular basis. This isn’t just about making sure that it is up to date and accurate. It can also help you avoid falling victim to ID fraud. If you sign up to one of the major credit reference agencies (Experian, Equifax, Callcredit) then you will also be able to sign up for email alerts that will tell you if activity has changed on your credit record.

  15. Be prepared to sit it out until your record improves. Your credit record will generally cover six years or so. Eventually even negatives here will naturally disappear from it if you wait long enough.

You may not be able to clean up your credit record completely but, with a little care and attention, you can make it look better to lenders. A credit record that is full of negatives will not be of interest to any lender. If you can mix it up with some positives then they may be more open-minded.
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