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Simple debt advice - with no up-front costs
Tuesday, 28th April 2009
Nobody is entitled to credit, but there is a lot you can do to help improve your chances - but remember there’s no overnight fix. Clearly lenders want to minimise their risk.
Before attempting to rebuild your credit you should be confident of your financial situation. Borrowing further, other than in some cases to consolidate or move credit, when you are in a difficult situation is rarely a good idea.
There are budget forms for free on the site which will help you determine the amount of disposable income to service your debts. We strongly recommend you use one of these first.
There are 3 steps to getting back on the ladder:
The majority of people get in to a ‘bad credit’ situation because they ignore their creditors requests for payment. Most large lenders have entire departments dedicated to dealing with borrowers that are unable to meet their repayments. They don’t want you to default on your credit agreement any more than you do.
The 3 most common ‘bad credit’ indicators are:
Other useful tips
If you can’t rectify all of the ‘black marks’ on your file, then you can ask the credit reference agencies to put notes on your file – however lenders’ automated credit scoring systems don’t read these. The only time that they may be seen is when a declined application is appealed and an underwriter manually reviews your file.
Once you understand how you’re going to ‘tidy up’ your past financial situations you should then look at your current situation. You need to understand how lenders look at your file. What counts for you, and what counts against you?
Once everything is in order – your past and current credit and you wish to apply for further credit there are several things to bear in mind. You should apply for credit that you think you will get. If you’ve had defaults and late payments then applying for a £10,000 unsecured loan (even to consolidate your debts) is unlikely to be successful. You need to think about what your eventual goal is to achieve, maybe this is:
There’s a lot to take in, but with a little effort and some time you should find yourself in a considerably better position.