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If you have a bad credit history, the best way to improve your credit report score is to obtain credit. While logic would suggest otherwise, having credit builds a credit history, which in turn makes you look more attractive to lenders.
Consider applying for store cards or a credit card.
Bad credit card deals are usually reserved for people with poor credit scores. Capital One and Barclays offer credit cards for people with bad credit at interest rates of around 34%. Credit with high rates of interest should be used regularly and for small purchases.
This will ensure you are able make repayments in full every month. By doing so, not only will you avoid incurring high interest on your spending but you will also create a good credit history. You may want to set up a Direct Debit to help you budget.
After a year of using your credit card you may be able to enter the playing field of mass-market credit cards with more reasonable rates.
Alternatively, being a co-sign on a credit card with a parent or close friend will improve your credit rating while not adversely affecting the main cardholder. However, they may need persuading!
A lender is not obliged to explain reasons for refusing credit in any great detail. However, you can ask them which credit agency they used when conducting a background credit check. It is likely to be one of two agencies, either Equifax or Experian (Barclaycard use both).
Contact credit agencies for a copy of your credit report and do a credit check. There may be an error that you can have corrected, although proof may be required. In addition, you can supply a credit agency with a ‘note of correction’, which will give you an opportunity to explain reasons for missed payments etc.
Tips to improve your rating:
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