Under Construction: How to build a good credit history. — Part II (Money Talks Series)

Read Part I yet? You should have! If not see here: Part I

Context innit.

Getting to work- PHASE II:

Look out for financial associations

If you’ve recently held an account or service with another person, CRA’s will note this. If the other individual has a decent credit history this can have a positive bearing on your credit report. However if their history is substandard this can possibly have a dent on your score. In any case if you aren’t associated with the person anymore get it off!

Make payments on time (or let them know otherwise)

Late payments show up. However letting your lender or service provider know in advance that you are late can have a positive effect on your credit file. If you’re facing financial difficulty and give them the heads up you may be offered the chance to make a payment plan or ‘promise to pay’. Usually this triggers an adjusted payment date and it won’t be reported as a late payment provided you keep up to date with whatever is agreed.

Time applictions properly and use quotation searches

Most credit searches appear on your credit file. These searches are referred to as ‘full’ searches and they leave a ‘footprint’ each time. These footprints can have an adverse effect on your credit rating as it may appear to other lenders that you are desperate for credit. A lot of lenders appreciate this as well as borrowers’ reluctance to undergo full searches and offer what is called a quotation search.

These searches are exactly what it says on the tin- they are used for providing quotes or verifying identity. Quotation searches do not appear on your credit file for other lenders to see, however they will show up for your own reference as part of data protection. Ideally look for lenders who will run a quotation search/ pre-approvals process where possible.

Likewise if you apply for credit and are rejected do not apply straight away. Try to find out why you were rejected, this may take some digging, and have a look at your credit report. In any case you should wait 3–6 months before you consider applying again if you want to keep your credit score intact.

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I hope you found these posts useful in planning your next steps towards strengthening your credit score.

Find out more about Money Talks: HERE

If you have any questions; suggestions or tips please do DM me on Twitter @Dejrw or email: Jon@heyjrw.co.uk