Over the last weeks, we covered everything from ‘What is credit?’ to ‘What happens if you get a bad credit score?’ in this Credit series. Your credit rating matters more than ever as it’s one of the main factors lenders use when deciding whether to accept your credit application and even how much to charge. But what happens if your credit rating isn’t in the best of shape, there are things you can do to build it up and fix any problems. Here’s how you can do both.

Stop applying for credit

If you have been declined for credit, your best bet would be to have a look at your credit report and to start amending any problems. Sorted out any problems on your credit file and improve your credit score.

Check your credit file

Before you apply for any type of credit, check your credit report. You can view this from as little as £2 from one of the three main credit reference agencies or £6 for all three. Make sure that all the information on the report accurately reflects your circumstances as mistakes can hurt your credit rating.

Space out credit applications

A lender will check and leave a credit application search ‘footprint’ on your credit report each time you apply for credit. Space out your credit applications and limit making several applications close together as this could be a sign of financial stress to lenders or even fraud

Check that you’re on the electoral register

You can apply at Gov.uk and this will improve your chances of being accepted for credit. Don’t worry, you can still opt out of the Open Register, which is the version that can be sold for commercial firms to use. Prospective lenders and credit reference agencies use this to check who you say you are, and where you are saying that you live. Living at the same address, being employed by the same employer and having the same bank account for a reasonable period of time will also help.

Protect your identity

By regularly checking your credit report you can also look out for unfamiliar or suspicious entries, such as an account you didn’t open or new credit card applications you didn’t make – it could mean that you’re a victim of identity fraud.

Closed unused cards

Credit cards, store cards, direct debits and mobile contracts – if you aren’t using or need them then close them all. Lenders may consider the amount of credit you have access to, as well as the amount of debt you owe. You need to reach out and physically contact the providers and close the account. They will ask you for a reason for your leaving but stick to your guns and close it down.

Be financially delinked

Don’t let your partner or flatmate’s score ruin yours! Being financially tied into any joint form of credit such as mortgage, loan, bank account and in some circumstances, your energy bills with someone who has a poor credit history, could wreck your chance of being accepted. Write to the credit reference agencies and ask for a notice of disassociation and stop their credit history from affecting yours in the future.

Don’t miss or make late repayments

Missing and or late payments can really damage your credit score and will stay on your credit file for up to 6 years! Defaults, three or more missed payments, will hurt you the most in the last 12 months. So repay all debts by direct debit even if only the minimum – making sure that you will never be late with the basic payments.

Pay off your debts

Paying off more than the minimum payment signifies good behaviour to a prospective lender. To be seen as managing your debts well, ensure that you’re making progress into repaying what you’ve borrowed.

Build your credit history with a credit card

The easiest way to (re)build your credit history is with any credit building credit card. Make a couple of purchases on it each month and then repay the balance in full each month with a direct debit to build a good credit history. This will show that you can responsibly manage credit.