CLOSURES
Rebuilding your credit score
CLOSURES
Rebuilding your credit score
Rebuilding your credit score
If you’ve just finished paying off your Trust Deed or Debt Arrangement Scheme (DAS), or you’re fast approaching that point, you may be thinking about ways of rebuilding your credit score.
Having a good credit score is a big part of your financial future. The way it works is pretty simple: the higher your score is, the more likely you are to be accepted for the credit you need to buy a house, get a car on finance, or otherwise live a comfortable life.
An unfortunate consequence of entering into an arrangement is that your credit rating will have taken a hit. The good news is that now you’re debt free (or nearly debt free), you can kick start the process of improving your credit score with a few simple steps.
Know the score
According to Experian, nearly half (49%) of the people in the UK have never checked their credit score, despite it being a key factor in any lenders’ decision to give you credit or turn you away.
If you don’t know what your credit score is, then you’re not alone. But the first step towards rebuilding your credit score is knowing exactly where you stand right now.
Running a credit check is quick and painless. You can check your credit score online with either Call Credit, Equifax, or Experian. All you have to do is enter your name and some personal details, follow the instructions, and you’ll be given a score based on your information.
Even if your credit score is lower than you were hoping for, it’s important to remember that you have already done the hard part – paying off your debt. Now that you know what your credit score is, you can work towards improving it.
Look to the future
When you reach the end of your arrangement, it’s important for you to look to the future. On a personal level, completing your payment term frees you of the worry of debt and allows you to plan ahead.
Join the electoral roll
It might not be immediately obvious why this is relevant, but if you haven’t already joined your local electoral roll, it can be a helpful step towards rebuilding your credit score once you have completed your Trust Deed or DAS.
The electoral roll, or electoral register, is the definitive list of every person in the UK who is registered to vote. Joining it allows any future lenders to verify who you are, as it will carry your name and address, and is a useful resource for lenders running precautionary checks.
Being listed on the electoral roll is also a sign of stability. Lenders want to know you are who you say you are, yes, but they also want to know you’re someone to be trusted. Being on the electoral roll signals to lenders that you’re settled, reliable, and more likely to pay back debts.
You can join your local electoral roll by finding and contacting the relevant local authority, or by visiting the gov.uk website.
Don’t apply for credit too often
As you reach the end of your arrangement, don’t be tempted to abuse your new-found financial freedom by applying for credit too often. Rebuilding your credit score is a gradual process, and you can seriously set yourself back by sending too many applications at once.
Any time you apply for credit, the lender will conduct a hard search on your credit report. They leave a mark each time they do this. Making multiple credit applications within a short space of time can have a negative impact, because lenders can each mark left on your report.
Too many marks will leave you looking desperate for credit, and leave lenders wondering whether you can be trusted with it. So don’t give into temptation – if you are turned away, give it some time before reapplying. It will only improve your chances next time around.
Keep an eye out for errors
For your credit score to be accurate, the information in your credit report needs to be accurate too. If your score is lower than you think it should be, you may want to make sure there are no errors or inaccuracies in your report that are affecting your score.
This is why checking your report regularly is a good habit to get into. The quicker you spot any inaccuracies in your report, the quicker you can take action to correct them before they impact any credit applications you may be thinking of making.
Keeping your credit score in good shape is a vital part of your financial life, so it’s important to do everything you can to keep it that way. Check your report and score frequently to keep on top of your finances.
Get the support you need to rebuild
The process of rebuilding your credit score after paying off your Trust Deed or DAS is just that – a process. However you decide to rebuild your score, there are no quick fixes. It will take time.
Fortunately, at Carrington Dean, we specialise in helping people in your position rebuild after dealing with problem debt.
Not only do we have products and offers specifically designed to help people coming out of debt arrangements restore their financial profiles, we also have experts on hand to offer you the guidance and support you need, every step of the way.
What is your financial goal?
