Ten ways to clean up your credit history for 2007

By MoneyhighStreet Staff. Published on January 12, 2007 This post currently has no comments.

Credit cards

The way that you have handled credit, such as loans, cards, and mortgages, in the past can have a large impact on your chances of borrowing what
you need, and getting the best deal, well into the future. These 10
simple tips should help you to improve your credit rating.

Step 1: Understanding your credit report…

Your personal credit report is the heart of your financial CV. It lists
all the credit you currently have and your repayment history,
alongside information such as any county court judgments against you
and whether you have ever been bankrupt. Lenders will check this
report when deciding whether to make you an offer, so it is important
to know exactly what is there before you can make any improvements.

Step 2: Tidy up the details.

Is all that’s in your credit report up to date? Does it accurately
represent your current circumstances? If you find that you are in
disagreement with anything, you should contact the relevant lender,
explain the issue and ask them to remove or make amendments to the
entry.

Step 3: Protecting your ID.

If you notice anything strange, such as a loan application you know you
didn’t make - you could have been a victim of ID fraud and a
criminal may be using your identity to obtain credit. If you expect
you are a victim of this inform relevant the lender immediately, you
can also get into contact with Experian, the credit reference agency,
who offer a service to help victims of fraud; this service is free of
charge.

Step 4: Register for voting.

You should make sure that you are registered for voting at your current address. Lenders will use the electoral register to ensure that you are who
you say you are and live where you say you do. This is as a measure
carried out as a protection against potential fraud. If you aren’t
at all registered or you are still registered at a previous address,
they may ask for extra proof of identity and address, or turn your
application down altogether.

Step 5: Act independently.

Your credit report also has a section which itemises your financial
associates - the people with whom you share joint current accounts,
mortgages or credit cards with. When you make an application for
credit, lenders are also likely to check your associates’
credit reports too, to make sure that their financial situation
doesn’t make it difficult for you make to repayments yourself.
If you are separated or divorced, you should also separate your
finances. Inform your lenders and let Experian know that things have
changed and that you wish to be treated as financially independent.

Step 6: Avoid leaving footprints.

When you are checking out a new credit card, mortgage, or loan, make sure that any lenders you approach know that you just want some information and
you are not yet making a full application. Making a full application
will mean that they will search your credit report; this will leave a
record, known as a footprint. If in the future when you come to make
another application for credit there are lots of footprints on your
report, they may think you are desperate for money or that you may be
planning a fraud.

Step 7: Cut down on borrowing.

Lenders often take preference to people that have comfortably managed their
repayments over a significant period of time and that aren’t
struggling to keep up with numerous debts. For instance, if you have
lots of credit cards, see if you can pay off a few completely, this
should help boost your reputation for repayments.

Step 8: Don’t fall behind.

Make all your repayments on time and never take out more credit to pay off
interest on existing borrowings. Instead, you should let the lenders
know you’re having problems; they should help you to work out a
schedule of payments you can better afford.

Step 9: Be Truthful.

Never lie or blur the truth in an application for credit, this is classed as
fraud and could leave a black mark on your credit report. If you have
given false details or deliberately withheld required information, it
is likely that lenders will uncover the facts from somewhere. A
black mark on your report will cause you great difficulties when
applying for credit in the future.

Step 10: Check your Credit Report Regularly.

Your credit report will change all the time, so it is important to check
it regularly to be sure that it is always up to date and that nobody
is running up debts fraudulently in your name. Fully understanding
and managing your credit history will almost certainly aid you in
getting the credit deals you really want in 2007.

Check your Experian credit report online for free with a 30-day trial of
CreditExpert. Click here to find out more.

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