Build up your credit rating

This is the time when you can start to think about rebuilding your credit rating. If you’ve been late with credit card payments or had difficulty paying your mortgage or other bills you will probably have a much lower credit score now.

You can find out now what’s being said about you on your credit report. Follow these steps to get your score for free:

Click on this link for CreditExpert. It will take you to their home page where there’s a green  “30 Day Free Trial” box. Click on it, and you’ll be taken through to the registration page.

Now follow these simple steps:

• Complete the registration.
• Make a note your details, including the credit file reference number.
• Your PIN should arrive in the post in a few days.
• Use the PIN to log in online and check your credit record.
• Inform CreditExpert of any inaccuracies.Cancel your membership (so you don’t forget or get charged anything) by phoning 0800 656 9000 and selecting Option 4. You can email but you’ll be quoting your bank details, so it’s best to speak to someone on the record.

Is it a low score? Right, time to start improving it!

It doesn’t happen overnight. It takes at least six months – probably more like a year – to get a better credit record, particularly if you’ve been bankrupt in the last few years.

• The first thing to do is correct any mistakes on your report, as we talk about above.
• Got accounts you don’t need? Close them. Financial companies are paying attention to the total amount of credit available to you. So while you may not be using them, dormant accounts could still be affecting your credit score.
• Also, make sure you are on the electoral roll. Weirdly, not being on that can count against you for your credit rating. Just ring up your local council to get yourself put on it.
• If you think you might have a low credit score, but you want to know how much a company would charge for a loan, ask them to do a ‘quotation search’ not a ‘credit search’. This means they will give you an idea of the interest rate they would charge but they won’t do a full credit check (and then potentially refuse you). Every time a company does a credit check on you it is recorded – particularly if they refuse you credit. This harms your credit rating.

That done, the main way to improve a credit record is by borrowing money and paying it back religiously, on time, every month. Lenders are looking for proof that you’re capable of repaying borrowed money.

“But how can I borrow if no one will lend to me?!” you wail. You do it by borrowing from one of the very expensive, ‘sub-prime’ lenders and making sure you pay back before the interest period kicks in. In other words, take out a credit card with a very high APR, use it a small amount every month and then pay the bill every month during the interest-free period. There are a few companies that offer credit cards to people with poor credit records.

If your credit rating is poor but not terrible (i.e. you don’t have CCJs against your name and you have only missed a payment or two in the last year) then you could try the Barclaycard Initial card which is specially for people who want to strengthen their credit rating or rebuild their credit history. The interest rate is high – 29.9% typical APR – so only get this card if you know you will pay it off every month and you are serious about rebuilding your record.

Vanquis (part of Provident Financial which specialises in the ‘sub-prime’ market) does a Vanquis Visa card with a whopping 39.9% interest. It is specifically aimed at people with a bad credit history who can’t get other cards. It has a 25-day interest-free period from receiving the statement which gives you time to pay it off. DO NOT USE IT UNLESS YOU KNOW YOU CAN PAY IT OFF. You think things are bad now? Just see how you feel if you use this, can’t pay it all back and then get the massive interest slapped on every month.

CapitalOne also does a very high interest credit card (34.9%) which it will offer to people with poor credit histories (or no credit history which can also be a problem if you want to borrow). Again, do not even think about using this card if you are struggling to pay your bills now.

If you’ve have been made bankrupt in the last few years or you have started an IVA scheme, ring up the above companies for a general quote before applying. It’s quite possible even they will reject in the early stages of an application.

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Make a little…Save a Little…

Get your friends to make you money! There are lots of ways your mates can make you some money, using minimum time and effort. We’ve actually dedicated a whole article to this topic which you can read here, but in the mean time here’ s a few of our favourite ideas:

• Make money by referring a friend. Sign-up to a website called refermehappy.com and then refer your friends to some of the great deals they advertise. If your friend buys the deal (it could be anything from a new broadband offer, holiday, credit card, phone etc) you will get some cash. Simple as that.
• Get your friend a job and make yourself some money. Sign-up to Jobfact! for free and then refer your friend to any jobs you think they might like. If they end up actually getting the job you get £100. Sign-up to Jobfact! now.

Save money when you buy online by searching for discount codes on voucher code websites. There are loads of them out there – a few goodies are vouchercodes, everydaysale and myvouchercodes. Not all of the vouchers work, many expire before they are taken off the site and others just don’t work. But there are some gems that can really help you save money.

Never buy according to what vouchers you see, but if you’re buying anyway it’s always worth a look. Confused? See our full article on voucher codes here.

Next actions:

• Get ready to save even if you don’t have any money at all.

See you next week,

Jasmine and the Moneymagpies

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