1. Building a good credit history
Having no credit history is no better than having a bad credit history. The credit reference agencies try to predict your behaviour. If you have no history at all, it makes it difficult for them to do the prediction and you are more likely to be rejected.
The best way to solve this is to build a good credit history (or repair it if you had a bad one) by using any kind of credit product and operate it perfectly. It might be easier to start with a credit card you can get hold of. Use it for anything instead of using your cash or debit card. Set up a direct debit to pay off at least the minimum payment every month, pay off the full amount regularly. If you have no credit history to start with, your credit limit may be very low and the interest rate charged could be very high, remember always stay within limit and never miss your payment.
2. Correct the address on all active credit accounts
Go through every active credit account on your credit record and ensure the address is up to date. You may not have used your old mobile phone contract for a long time, but if you have a different address on that account to your current one it may affect your credit checks. Also by checking your credit record you may be able to identify mistakes, if there are any.
3. Evidence of stability is good for your credit record
Being home owners and employed tend to be accepted more. Always use your landline phone in any credit application instead of you mobile phone. If you prefer to be contacted by mobile phone, state that in the application, but having a landline phone on file will help with security checks and improve your chances. Not switching your banks and changing your employers too frequently and staying in one address for a while also help.
4. Time your applications smartly and spread them out if you can
Many credit searches left on your file in a short space of time hurt your credit score more than you can imagine. Spread out not just the credit applications, but your car insurance, home insurance and mobile phone applications – all searches will leave a “mark” on your file. Moving house, changing jobs and taking time off work (and stop earning) also disrupt your credit score. Plan ahead, make important application before these events.
5. Cancel unused credit cards and credit accounts
If you have a range of unused credit cards, it is best to cancel them. Having too many credit cards, even if you do not use them, can be a problem. Before you cancel your cards check if you can use them to shift your debts at a cheap price, transfer your debt to them and cancel those expensive ones. Have a long standing credit account with good credit histories is good for your credit score. If your mobile phone contract is due, do not cancel it and open a new account for a “better deal”. You should contact the “customer loyalty team” to negotiate a price better than the one you can see on the Internet.
6. Keep your finance separate from your partner with a bad credit record
Living with someone with bad credit record wouldn’t hurt. But if you are financially linked together, for example having a joint bank account or joint mortgage, you are most likely being co-scored by credit reference agencies. If you have split up with someone who had a bad credit history, and you used to share a bank account, always make sure you contact all credit reference agencies of your “disassociation” to stop your future credit score still being affected.
7. Get on the electoral roll
If you are not on the electoral roll, it is likely that even if you have a good overall credit score, you will be rejected for credits. Ask your foreign friends in the UK who are not eligible to vote, if they have been able to sign up for an Orange mobile phone contract? I bet you that most of them would have had problems.
You can sign up to vote at any time on the About my vote website. Simply enter you postcode to search for your local council, complete and post the form back to your local electoral registration office. If you are not eligible to vote, send your proof of residency to all the credit reference agencies and ask them to add a note to verify this.