Before the 2008 credit crunch, many individuals in the UK have relied on their credit cards to pay for practically everything they want and need. A lot of these individuals were also randomly offered credit cards by several banks without ever being questioned of their finances, principally credit card payments. This has made credit card consumers complacent and passive about their credit card handling.
Because of the consequences of the credit crunch on plenty of banks and lenders, they have imposed tighter regulations on how they grant loans and credit to consumers. As a result, receiving much needed loans has grown to be more tricky for a lot of people especially when it comes to mortgage, car loans, etc.
To have a nice credit rating, you should be alert with your records, receipts and documents that has something to do with your loans.
Scrutinizing every bits of information on your credit record is the first major factor whether lenders ought to grant you a loan or not. Your reputation as a reliable and honest borrower will mostly depend on your credit report.
Your credit report is sort of a reference of everything you borrowed, how much, from which lender, your payment practice and so forth, so you need to check it regularly and make certain that each and every element is correct, up to date, and in accordance with your payments.
The key details you need to be conscientious of are the balances that you know you paid but are still reflected as outstanding. A slip-up such as this should be cleared up right away as it will not only make you pay more needlessly, it will also make your credit rating suffer.
The errors on some basic details such as your name, address, phone number, or something else that is contradictory, should also be corrected straight away.
If you are moving to a new house, make sure you write to your water, electricity, phone and gas providers that you will be cancelling your contracts with them. This is to make sure that the next occupants (if any) will not be able to charge these utility expenses on your name. Getting your post redirected is also vital to prevent interception of your mails by other people that can be used to steal your identity.
If you share an account with a better half (e.g. live-in partner, spouse, etc.) be sure to cancel the account if both of you decide to end your relationship. If you are always on time with your payments and your partner isn’t, your credit record could get affected by it. This is what is known as a financial association.
Should you ever get to this point, you should cancel your joint account and create your own personal account. If the joint account still has a certain quantity of debt, you or your partner should shoulder that debt. Your ex and yourself can still pay for the debt together but it should be integrated to only a single individual account.
Lastly, erase the financial association from your credit report by telling a reputable credit reference agency.
If you have never borrowed any kind of loan or credit, and unless you are a newly graduate or a first-time employee, you could have a hard time taking out a credit card or other forms of loan.
This is because you don’t have a track record to show lenders that you are a borrower they can trust. To prime yourself for a loan, you can begin by applying for a credit-building card and use it to pay for things that is affordable for you and not be late on your payments, and maintain this account for at least 12 months.