UK Credit History

CREDIT HISTORY IN THE UK

2. Pay Your Bills by Direct Debit Set up some regular Direct Debit payments to pay bills such as your utilities, your home or mobile phone or any services and facilities you will be paying for on a regular basis. Not only will this give you a better credit rating, but you’ll probably get a discount for paying by Direct Debit and it will make managing your finances a little simpler. 3. Don’t Miss Payments Make sure you pay all your bills on time and ensure that you have enough money in your account to make the payment. Missed or late payments will count against you. If the lender has to go to court to get the money, then a county court judgment (decree in Scotland) will severely affect your ability to get credit and it will remain on your file for six years. 4. Manage Your Credit Cards If you have a credit card via your bank, ensure that you try and clear the credit used each month or remain under two thirds of the credit limit given to you. This demonstrates that you are not reliant on credit and can manage your finances well. If you have any credit cards that have not been used, cancel them. It reduces your credit risk as well as the risk of credit card fraud. 5. Get on the electoral register (if applicable) If eligible, being on the electoral register means that a lender can confirm the address you have provided as part of any application process. If you are not eligible to vote in UK and EU elections you will not be able to register on the electoral roll however, you should add a note to your credit report explaining why you are not on the electoral roll as this will be seen by any underwriters assessing your application. You can find out more about registering at the About My Vote website What impacts your credit rating? It is best to avoid those things that can have a negative impact on your credit rating in the first place. Here are some of the things that may affect it. + High levels of existing debt - banks and credit card companies may be nervous about lending you more if you’re already over stretched. + Missing or making late payments - on anything from your mortgage, credit card, personal loan, gas or electricity bills will stay on your credit file for six years. + If you get a county court judgment / CCJ - (decree in Scotland) for unpaid bills + Applying for lots of credit at once - when you apply for credit it shows on your credit report so it’s better to stagger applications. If you just want to compare rates, find out whether the lender can register a ‘quotation search’ on your credit report instead of a ‘credit application search’. + Open credit cards accounts that you never use - lenders will look at how much credit is available to you, not just how much you’re actually using. + Mistakes on your credit report - if something on your credit report is incorrect or doesn’t apply to you contact the credit reference agency immediately to have this investigated and removed. + Not being on the electoral register - this is used by lenders to verify that you are who you say you are. + Moving a lot - lenders feel more comfortable if they see evidence that you have lived at one address for some time.

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