Many people used to think that money makes the world go round but in the modern day; this is probably no longer the case. It is probably more accurate to say that credit makes the world go round, and this creates a very different situation for people. While it is not always easy to get your hands on money, it is often easier to obtain cash than credit, which is why some people are unable to do the things that they want in life.
If you have a bad credit score, you may find that you are unable to obtain finance for the things you need or want in life. You may not be able to obtain car finance, you may not be able to sign a finance agreement to buy a season ticket for the sporting team that you follow and you may not be able to find a mortgage to buy property. Your outlook on life may mean that one of these elements is more important to you than the others, but no matter what the most important element to you is with respect to obtaining credit, it is clear that accessing credit is vital for doing the things that many people take for granted in life today.
If you are asking why is my credit score bad, it can help you to start contemplating your credit file. A credit file should be viewed as a collection of information about you, and the file will contain information like:
- Your name
- Your current and previous addresses
- Any finance agreements that you have in place – either by yourself or as a joint finance agreement
- Credit information
All of these aspects are used to create a credit score and this is applied to you and your file. Whenever you make an application for credit, the lending company will review your credit file, look at the score and then make a decision on your application. This is why having the best possible credit rating that you can is vital if you want to obtain finance.
Always think about your credit score
In the United Kingdom, there are three main credit agencies, which are:
- Call Credit (also known as Noddle)
The three agencies may apply a slightly different rating to certain elements but by and large, they will all be similar. When you make an application, the lender will have a certain score level or bracket in mind. If your score is within their bracket or acceptable level, they will likely lend you the money you need or provide the credit you asked for. If your score is lower than their accepted level, you will be denied credit.
If you have a bad credit rating or you find yourself being denied credit, you need to look for ways to improve your score. At this point, it is worth remembering that people who have no credit history will be regarded as a risk by a lender. This is because with no credit history, a loan company or credit card firm will be unable to determine if you are likely to pay the loan back!
There are ways to improve your credit score
Things that you can do to boost your credit file include being registered on the electoral roll at your current property, not moving homes too often, not moving jobs too early and paying off all credit that you have taken out. If you can pay off any credit you have early, you will be seen as being trustworthy, which will improve your credit score.
This is where taking out a guarantor loan can help. If one of the ways to improve your credit score is to obtain credit and then pay it off, but you struggle to find credit, take the most suitable option that provides you with credit. If you can find someone who is willing to act as a guarantor for you, you will find that you can obtain credit at an affordable rate of APR. This is a much more attractive rate of APR than what you would find from a payday loan company, so this is the option to take if you are looking to boost your credit rating.
Obtaining a guarantor loan and making every payment will improve your credit rating and hopefully this will start to have a positive impact on your credit rating, allowing you to choose from more credit options in the future.
Andrew Reilly is a freelance writer with a focus on news stories and consumer interest articles. He has been writing professionally for 9 years but has been writing for as long as he can care to remember. When Andrew isn’t sat behind a laptop or researching a story, he will be found watching a gig or a game of football.