Why is your Credit History Important?
If you have the habit of making late repayments on loans and you think there will be little consequence. Think again! All financial transactions including debts, missing or late payments of bills is contained in your credit history and is readily available from any of the 3 main credit reference agencies. The worthier your credit history, the higher your chances of securing a loan, mortgage and credit card. Furthermore, a good credit history can earn you lower interest rate on loans and a higher spending limit on credit cards.
You have the legal right to see a copy of your credit report and it costs only £2. There are three main credit reference agencies you need to check:
If you find that you have a poor credit history, whether or not you have plans to take new loans in the foreseeable future, it is a good idea to have a good credit history at all times. The following steps are tips for improving credit history immediately
Spend only money you have.
Register to vote online or by post, so that lenders can ascertain from the electoral voter that you are who you say you are.
At some point, it will be necessary to take out another mortgage or loan, so improving the long term situation of your credit history is important.
Ways to improve your credit history in the long term
- Repay loans and bills promptly.
Frequent late payment of bills and debts screams volumes to a potential lender, a sort of deal breaker in your attempt to secure a loan. Strive to pay bills time, it will put your mind at ease and at the same time achieving a healthy credit profile. It is also wise to restrict impulse buying especially on credit, this way repayment of bills will be easier.
- Use a credit-builder prepaid card
“Some prepaid cards have a credit-building option that can improve your credit score. The way this works is you’re ‘loaned’ an amount, usually £60, by the prepaid card company. You sign a credit agreement and agree to pay the card company a monthly fee of £5 a month to repay your £60 ‘loan’. At the end of the year, providing you haven’t missed any fee payments, this will be recorded on your credit report as 12 months of successful repayments. Bear in mind that all prepaid cards charge fees”. Visit https://www.moneyadviceservice.org.uk/en/articles/ to learn more.