Top tips on improving your credit rating including information to help you understand bad credit. This slideshare will help you manage your debts and find the right debt solution for you.

1. A DAY IN THE LIFE OF
SOMEONE IMPROVING
HIS OR HER CREDIT RATING
What is a bad credit rating and how can it be
improved?

2. What is bad credit?
• When you’re looking to get a loan or mortgage, lenders will often run a credit
check on you
• This credit check will run through your financial history and a decision on
whether or not to lend to you will partly be made based on the data they receive
• If you’ve struggled in the past with repaying your bills or keeping up with your
payments, you could find yourself with a bad credit rating and the company may
choose not to lend to you
• Having a bad credit rating can feel like you have a black cloud hanging over
your head
• Being unable to pay off your debts could lead to your credit score decreasing
even further
• This could prevent you from receiving any kind of credit

3. Bad credit could prevent
you from getting…
• A Loan – Student, business, personal or otherwise, with a bad
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credit rating you could have a tough time getting a loan from
any of the high street banks
A Mortgage – The same goes for mortgages. If you’re looking
to move then you might want to take a look at your credit rating
first
Cheap Car Insurance – Drivers with bad credit ratings will
often be forced to pay higher insurance premiums when
compared to drivers with good credit – even if you have a
pristine driving record!¹
A New Phone – Looking to get the latest smart phone on
contract? You’ll find it tougher with a bad credit rating
A Good Job – Employers are entitled to check candidates’
financial history before deciding whether or not to employ them
¹http://www.consumerreports.org/cro/car-insurance/buying-guide.htm

4. What causes bad credit?
There are a number of causes that can lead to you being given a bad credit rating. If one
or more of the following apply to you then you likely need to look into how you can
improve your financial situation:
• You’re not registered on the electoral roll
• You’ve been declared bankrupt or received a CCJ (County
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Court Judgement)
Being consistently late on repayments, or missing payments
altogether– this includes loans, mortgages, phone and utility
bills
Exceeding your overdraft or credit limits – this is a key
indicator that you’re not in control of your spending
Having a high level of debt
Applying for credit from several different lenders at the same
time
Gaps in your housing or employment history – missing
information suggests a lack of stability
Note: If you’ve never borrowed money or used any form of credit,
there won’t be any information in your credit file. While this might
not be a ‘bad’ credit rating, you may still be rejected as you can’t
prove you’re not a risk to lenders.

5. How to improve your credit rating:
Paperwork
So it’s time to get your credit rating in order, but where do you start?
You need to manage your debt and credit in order to figure out exactly
where you stand and what action to take.
• First of all you need to do some paperwork – Get hold of your credit
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report and see what your current score is and whether or not there
are any mistakes
Get a grip of your repayments – Get organised and try to clear off as
much remaining debt as you can. Organise a payment plan with
your lenders for regular payments
Don’t miss these payments – Do whatever it takes, reminders,
calendars, alarms, just don’t miss them
Ensure you have up-to-date information about your employment and
residential history – Banks will use this information to determine
whether you’re in a stable position to lend to
Get on the electoral roll. If you’re not registered to vote, it’s less
likely that you’ll be offered any credit. You can register for the
electoral roll here

6. How to improve your credit rating:
Credit cards
One in five Brits have more than three credit cards in their wallet³.
Having this many cards could make banks wary of lending to you,
even if you’ve not accumulated any debt on them. If you have a lot of
credit cards banks could deem you as a risk because you have the
ability to go on a spending spree and put yourself at risk of not being
able to pay the money back and increasing your debt.
• Stop applying for credit – The more you apply for credit, the
further your credit score could decrease, leaving you more likely to
get rejected over and over again
• Reduce the credit you already have available – get rid of
unnecessary credit cards and store cards that don’t add
anything positive to your credit history
• Contact the provider directly and don’t get won over by their sales
talk - you’re on a “credit diet” remember!
• Start looking at ways in which you can spend sensibly to improve
your credit rating
³http://www.equifax.com/about_equifax/newsroom/en_gb?ncId=1187896722503

7. Finding the right option
•
Find a card that works for you. A credit card
doesn’t need to be your only option. If you
struggle with managing your finances and
making payments on time, a prepaid card
might be a better option
•
Look for features that will benefit your
situation. Whether it’s free payments and
transfers or 24/7 access to your account via
online banking to monitor your spending,
there’s something out there to suit your needs
•
Adding a credit building feature to your
account will allow you to pay your monthly
fees in the form of a loan repayment plan.
Keeping up with these payments could show
lenders you can be trusted with credit in the
future

8. Don’t expect a quick fix
Even when you’ve done all of these things, don’t
expect to go from credit nightmare to loan
heaven over night. You need to show that your
financial management is consistently good over
a period of time in order to rebuild your rating
and prove to lenders that you are no longer
such a high risk prospect.
• The longer you keep up these tactics the
better your credit score will become – opening
you up to much more attractive deals on the
market
• Don’t get sucked in - keep up your good
habits and don’t get back into the bad books
with the creditors

9. Sources
• http://www.which.co.uk/money/credit-cards-and-loans/guides/your-credit-
report-explained/why-do-i-have-a-bad-credit-rating-/
• http://www.equifax.com/about_equifax/newsroom/en_gb?ncId=11878967225
03
• http://local.direct.gov.uk/LDGRedirect/index.jsp?LGSL=364&LGIL=0
• http://www.moneysavingexpert.com/loans/credit-rating-credit-score#improve