How to Repair a Credit Rating in the UK

Written by chris sherwood
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How to Repair a Credit Rating in the UK

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Order a Copy of Your Credit Report

The first step to repairing your credit report in the UK is ordering a report of your credit to see why it's bad. You can do this by contacting either one of the two credit reporting agencies in the UK, Experian and Equifax. Links are provided in the Resources section.

Correct Mistakes

Credit reports are not immune from mistakes. Once your credit report arrives, thoroughly comb over each piece of information for anything that looks out of place or incorrect. Even if you are unsure whether something is incorrect, write it down. Once you have a list of items that need fixing, contact the credit reporting agency again to challenge the incorrect information on your file. Each agency has a different process for doing this, which can be found directly on its website.

Pay off Delinquent Debts

Once your credit report reflects what you owe, prioritise your debts by how much you owe and how delinquent they are. Call each of the companies listed and ask about a settlement offer. Settlement offers can be as little as a quarter of what you owe in some cases. If the offer is low enough and you can afford it, pay off as many of your debts as you can that way. Take the rest of your debts and organise them by what you can pay off first. Define how much money you can afford to pay each month on your bills. Pay the minimum on all but your smallest debt. Take everything that is left and put it toward that smallest debt. Once you have paid off the small debt, take what you were paying on that debt and apply it to the next smallest debt. Continue this process until all of your debts are paid off.

Unsecured Credit Cards

If your credit is good enough to apply for credit cards, you will want 2 to 4 of them on your credit report. If your credit is not good enough, apply for a secured credit card. Secured credit cards take a cash deposit (that you put down) to secure your line of credit. This means that if you put down £195, you will have a £195 credit line. The great advantage to these cards is that you build credit without risk. If you do not pay your bills, the company will simply put the £195 cash you put down and use it to pay your bills and cancel your card. Also, many of these cards offer real credit cards once you have proven yourself to be responsible.

Prevent Future Bad Credit

Once you have started to build your credit back, the most important step is to not ruin your credit score again. You can assure this by paying your bills on time, not spending more than you can afford, paying at least the minimum on your credit cards each month (pay them off each month if possible) and living within your means.

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