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Raise Your Credit Score

Applying for credit is something most people need to do in their lifetime and being refused is never a nice feeling. If you have been refused credit or know your credit score is not as high as it could be then taking remedial action is the best plan to follow.

In simple terms, your credit score is used by lenders to calculate whether they will offer credit. A score is a snapshot of your credit risk at a particular point in time and the higher the score, the lower the risk to lender.

First and foremost if you have been refused credit then do not continue to apply for several other products as a tirade of applications on your credit history can act against you when lenders assess your suitability.

Do not panic if you have an unsuccessful application because lenders can refuse to provide credit for many reasons. Nobody has an automatic right to credit but lenders cannot refuse your application because of your race, sex, religion, sexuality or address.

It is a good idea to find out why you were refused credit as you can then take action to remedy the situation and thereby improve your chance of getting credit in the future. Only the lender can tell you why they refused your specific application and should give you the main reason, or reasons, behind their final decision.

Credit providers can refuse an application without giving any reason why, however, most have codes of practice which stipulate you should be informed of the main reason behind the decision if you ask.

When lenders look at a credit application they tend to assess borrowers in terms of how likely they are to make payments on time and in full. A trail of bad debts usually results in credit being refused whereas a history of making repayments in full and on time should definitely count in your favour.

Before approving an application for credit the lender will check whether you have a history of making repayments on time, so settling all your bills sensibly is an effective way to improve and build your credit score and encourage lenders to borrow to you.

Credit providers also search for details such as your presence on the electoral roll so your permanent address can be confirmed. Simply making sure you are registered can boost your credit score almost instantly. Check with your local council if you are unsure.

A low credit score could also be caused by current outstanding debts so make sure you pay off as much as you can on any existing loans, credit cards or overdrafts before applying for more credit.

If you cannot pay off all your debts in full then keep balances low on credit cards and other credit products and avoid having too many accounts open at any one time.

Adam Singleton writes for a digital marketing agency. This article has been commissioned by a client of said agency. This article is not designed to promote, but should be considered professional content.

Article Source:http://www.articlesbase.com/personal-finance-articles/raise-your-credit-score-1428441.html

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November 7th, 2009 | Category: Personal Finance | Comments Off
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