Improving your credit rating

As a lender, we at Field Loans feel we have an obligation to help those with poor credit ratings improve them. Although loan products are available for people like these, it is in the interest of the economy of the United Kingdom that fewer people are in debt. For this reason, we have prepared an article to help you look at ways that you can improve your credit rating in an efficient manner.

Start by checking your credit report

You may just be on the wrong side of a bad credit rating and for this reason, it is imperative that you check your credit report. This is something you can do anually for free. If you need to check it more than once a year, you may be required to pay for each extra credit report you generate. Why is it so important to check this? Well, believe it or not, mistakes are often made when it comes to your credit payments. You may have paid off a loan which would be a good boost to your credit rating but does not reflect on your report, or you may even be shown to have defaulted on a payment when you never did. By fixing these errors you can make an immediate improvement to your credit score. Also remember to carry on checking, at least once per year to ensure other mistakes do not crop up.

Use bad credit loans or credit cards in an efficient manner

If you suffer from credit problems, often the only credit products available to you are those bad credit offerings, for example, a logbook loan, a payday loan or a ‘bad credit’ credit card. Although they do have some negatives (for example a higher APR rating than other credit products), if they are used in an intelligent manner, they can be an effective way to in fact improve one's credit rating significantly. By using them in a responsible manner and making timeous repayments (and always the minimum payment or more), you can quickly build up your credit rating, therefore opening a world of other credit options.

Watch those credit card charges

Having said that credit cards can be an effective way to improve your credit rating, it is important to pay special attention to the relevant charges. The best way to do this is to only use around 30% of the credit that the card provides. Make sure you know when every monthly payment cut off date is and ALWAYS pay on time. Even just a few days late can result in a negative impact on your credit report. If you don’t pay on time, you will also be charged penalty fees and if these are not paid, the impact on your credit score is even greater.

Other payments

When it comes to other payments, including bills, make sure you pay these on time as well as these will also affect your credit score negatively should you do so. Even something as simple as a utility bill or phone bill needs to be paid timeously each month, especially your mobile phone contract. Why is this so important. Well did you know that around 35% of your credit history is taken from your payment history? Missing payments or delaying them will affect this portion of your credit score significantly and the lower it is, the further you will slip towards a bad credit rating.

Start by paying off high-interest debts first

When tackling your debt, you are affecting your credit rating in a positive manner. Start by targeting those debts with the highest interest rates first. Debt affects your credit score to the tune of 30% of its total, so showing you are able to deal with it effectively and pay it off can only have a positive implication for you credit rating. By targeting the highest interest rates first, you can remove those that keep adding to your total debt owed because of their high interest.