Here I have put together an infographic of the top 8 things you can do to improve your credit rating.
But whilst there are things you can do yourself to improve your credit score, there are also some important things to consider when it comes to taking out credit, especially if you are taking out a joint credit account.
Let’s separate the fact from the fiction:
There is no such thing as a Blacklist
Yes popular to contrary belief there is no such thing as a Blacklist! If you, or anyone you live with, have a poor credit history you will not be put on to a list that lenders can use to make a decision on your application for credit.
Your credit rating can be repaired and is not affected by those you live with
Having been in debt at some time in your life will not affect you being able to obtain credit in the future. IVA and bankruptcy stays on your credit file for 6 years, once your defaults have been removed from your credit file you’ll be in a position to start building up a positive credit history again.
Your credit history will not have any impact on the people you live with, nor will theirs affect you. Lenders no longer check the credit files of those living at your address with you. If, however, you have a joint account, lenders will still check this.
Taking out a joint account with somebody with poor credit can have a negative effect on your credit score, even if you have an excellent score, so always bear this in mind when opening joint accounts.
Only half of the debt is mine
Never be fooled into thinking by taking out a joint credit account that you are only solely responsible for half of the balance. If the other person in question defaults on their payment towards the debt, your lender can still chase you for the full amount.
Always carefully consider everything before taking out a financial commitment with anyone else. Are they as dedicated as you to pay the debt back? Are they in stable employment and can they afford to keep up with the repayments?