credit history10 top tips to help you to mend and improve your own credit score and repair credit history.

One of the easiest ways to repair bad credit and  improve your credit score is to repay your debt – simple but easier said than done!

It’s true though, lenders feel much more comfortable offering money to customers if they know that the customer hasn’t “maxed out” all their existing debt elsewhere.

1. Pay Off Debt When You Can

If you are using more than 50 per cent of the credit already available to you, then you are using too much. The sooner you repay off your existing debt, the better your chances of being allowed to start a new credit agreement.

2. Close Any Old Or Unused Accounts

Having too much credit – even if you are not using it – can also be a problem in the eyes of lenders. If you have a number of different credit cards, perhaps for emergencies, ask yourself if they are really necessary. It may help your credit score if you close down accounts that are ‘clogging up’ your file.

3. Show Some Stability

Lenders can be a fairly conservative bunch. They will be more than likely to look favourably on an application for credit if the customer is a home-owner rather than a renter, and usually prefer applicants to be employed rather than self employed. If you stay with the same employer, with the same bank, and in the same property for a few years, your credit score will improve considerably.

4. Avoid Too Many Applications

The more times you apply for credit, the less likely you are to be successful. Credit searches, whether for a mortgage, a credit card, car insurance or even a mobile phone, will remain on your credit file, and could have a negative impact on your overall credit score.

5. Get On The Electoral Register

If you’re name is not on the Electoral Register, there’s a good chance that you won’t be able to obtain any credit. Credit ratings agencies look for proof of residency to help lenders ensure that fraudulent applications are not allowed to go through as legitimate.  You should write to your local council to make sure that you are on the register. If you are not eligible to vote (i.e, a foreign national), you can send a ‘proof of residency’ to the credit ratings agency to confirm your residency.

6. Time Your Credit Applications Wisely

Make sure that you make any applications for credit at a time when your credit score will be strongest, rather than waiting until your circumstances have changed and you are more likely to be rejected. Moving house for example, could have an impact on your credit score, as you wait for your council to amend your Electoral Register information. If you think you will need credit, make sure you make the application before your move.

7. Keep Up Your Repayments

If you want to keep your credit report looking pristine, you should always try to make your repayments each month. Missing one or two payments will cause problems with your score, if you continue to default you could find yourself with a County Court Judgement (CCJ) against you, which could take more than six years to be removed from your credit file. If you are unable to make a payment, contact the lender as soon as possible to explain your circumstances, they may be able to help you come up with a solution.

8. Avoid Joint Finances

When you open a joint account, you become financially linked with the other person. This link could have a damaging impact on your credit score, if that person has a poor credit history, If the relationship ends, close the joint account and contact the credit reference agencies asking them to disassociate you from the other person.

9. Build Your Own Credit History

If you don’t have a credit history, you may find it difficult to obtain any credit. This is because lenders look at your previous behavior in order to establish your credit worthiness. No credit means that they don’t know what to make of you.

If you find yourself in this Catch-22 situation, you may want to think about taking out an impaired credit card, and slowly build up a credit history from scratch. These cards often have extremely high rates of interest (around the 30 per cent mark), but providing that you repay your balance in full each month, you can avoid paying interest and build a credit history that will allow you to obtain cheaper credit from mainstream companies.

10. Perform Occasional Checkups On Your Credit File

Once you’ve got your credit score at a level you are happy with, you should keep reviewing it from time to time, monitoring any changes and making sure that the information held about you is still up to date. Keeping track of your file is also useful in making sure that your identity is not being used fraudulently.