These days many lenders advertise that they will accept borrowers with a poor credit rating, that they will lend to people with CCJs or defaults. The fact is that these lenders are either;
A – Very picky about what and who they lend to
B – Very expensive and lending with restrictive terms
Either way, borrowing with a poor credit rating is far more difficult than if you are nice and clean.
Limited Company Borrowing
Even if you are a limited company, your personal poor credit rating will still come back to haunt you. Nearly all limited company lenders will want a personal guarantee from the directors and will look at your personal credit rating as an indication of how you will conduct any company borrowing.
All this aside, sometimes a poor credit rating can be a result of circumstance. A long history of poor credit is not circumstantial or coincidence, but the odd thing here or there can be.
The big question that is often asked is ‘How can I improve my poor credit rating?’. Well, there are a few things you can do to help, so read on.
Start Improving Your Poor Credit Rating
These are the essential steps to take to start getting your credit rating back on track;
- Apply for your credit report from one of the above supplier
- Check the details on your credit report
- Make a list of any errors on your credit report
Errors on credit reports are quite common, they are not necessarily criminal or as a result of anything untoward, normally they are genuine mistakes but they do happen.
Get Into The Details
Now you have the outline information and know what your credit report is saying about you, then you can start to tackle the things that will improve your poor credit rating;
- Dispute incorrect, wrong or missing information
- Amend any incorrect CCJ’s
- Update your credit report, especially if you have had a few address changes or had a bankruptcy annulled
- Financially disassociate yourself from ex-partners. Divorce, marital separation, people you share a house with, all these come under this bracket
- Clear up any identity confusion. This is not ID fraud, more commonly it can be a brother, house mate, partner etc
- Explain any missed repayments. The most common are mobile phones. You change company, change phone, cancel the DD etc. Look at this one in detail
- Report suspect activity on your accounts. Again, this is often not criminal but a result of someone clicking the wrong button, using the wrong payment card etc
Remember that none of the above will fix things overnight, but each step is a positive one to getting a better credit rating.
Keep A Good Credit Rating
There is no point sorting your credit report out unless you are going to keep it looking good. To do this there are three simple steps to take. They look something like this;
- Inform all your lenders about personal tragedies. This means deaths, divorces, absences etc
- Inform lenders when you change address, every time. Give lenders new phone numbers and tell them when you get married, divorced, change your name etc
- Keep checking your credit report. Make it a 3 or 6 monthly thing to do
Go Improve Your Credit Rating
This is all about simple actions to get your credit rating improved. If you have any comments about this post then please add them above, or contact Lime Consultancy direct here.
By Dave Farmer