Building a good credit history/repairing past problems. We have established that credit scoring tries to predict your behavior. If you do not have a credit history it is more difficult for lenders. The bottom line here is, if you do not have a credit history then you have a very high chance of rejection. If you have a poor, or indeed, no credit history here are a few ideas to help remedy this problem.
Expensive Credit Cards
Apply for a Credit Card that has an outrageous interest rate. Expect this to be 30% APR or more. There are many Banks out there that will accept your application for these types of cards.
Tip: If you decide to take a high interest rate card use it for up to a year, but spend very little each month. If you can use two cards to build a better credit score but.
Remember: Repay the FULL balance every month to avoid that high
interest cost. This is a useful way to help you move into the mainstream. This is also helpful if you have a bad credit history. After that, you should’ve built a credit history allowing you to move into the mainstream. This tactic is also useful for those who’ve defaulted in the past.
Don’t be late
The golden rule is Don’t Be Late and always pay at least the Minimum Required not matter what your situation. Any late or non-payment will immediately result in a bad credit entry and you will be right back to square one. If you do find yourself in a tight spot, contact the lender without delay. They are there to help. They do not want to see you default on your credit. The lender will take the stance that it is better to get some than none. Although this will adversely affect your credit score it is better than having a Court Judgment set against you. Set up a Direct Debit to repay either the balance in full or the minimum amount required by the lender. If you are paying the minimum try to set aside extra money each month to reduce the balance further. It will cost you less in the long run.
Joint Finances
If you are marrying or living with some who has a bad credit history this should not affect you as the other persons information will not be added to your credit file.
Beware : If you are linked financially, that is if payments are in joint names, such as the Mortgage or a Joint Bank Account this can have an impact on your credit history. If you or your partner have any bad credit history then the rule is keep your finances apart. If you were to separate you should inform the credit agencies and request a ‘Notice of Disassociation’. This will stop their credit history from having any
adverse affect on yours