How to go from a bad credit rating to a better one
If you’ve had problems with your credit rating in the past, you’re probably wondering how long it takes to go from a bad credit rating to a good one. After all, having a better credit score means you’re more likely to get credit or be able to borrow at a better interest rate.
And a good credit rating isn’t just about borrowing money. It can also make it easier to get a mobile phone contract or a rental agreement – any service where someone runs a credit check on you.
Going from a bad credit rating to a better credit rating isn’t something that happens overnight though – it takes time to improve the damage.
How long will it take?
There isn’t a set time to improve your credit score. For example, you can’t say that you can turn your credit rating around in just a few weeks. It all depends on how damaged your credit score is to start with. The worse your credit score is, the longer it will take to improve it.
It usually takes about 30 days for creditors to report new information (like new balances or payment activity) to the credit bureaus, and the frequency of updates can vary by creditor. There are three main credit reference agencies or credit bureaus in the UK – Experian, Equifax and CallCredit. So even if you start to make positive changes you may have to wait before you see any change. The advice they offer is to check your score regularly.
Check your credit score for free to see what your rating is currently. This will let you see how far you have to go.
Rather than trying to improve your credit score quickly, it’s better to focus on building it up slowly over time. By doing this, you can ensure that your credit score is strong and that you’re on top of your financial situation.
And remember – your credit score isn’t the be-all and end-all. It’s the rating that the credit reference agencies give you based on your credit history. All lenders have different criteria for borrowing so while you might not be able to borrow from one, another might accept you. What’s important is that it’s affordable. You can read more about this on our blog on the credit blacklist.
Five ways to go from a bad credit rating to a better one
1) Get on the electoral roll. Make sure you register to vote – this can make it easier for lenders to verify your identity. If they can’t find you on the electoral roll, they might reject you.
2) Stay put. If you move home a lot, this could make you seem unstable. Try to stay at one address for a longer period to create consistencies.
4) Make a clean break. If you had joint credit or joint bank account with an ex-partner, there could be a ‘financial link’ between the two of you. File a Notice of Disassociation to make sure their credit score doesn’t affect yours.
5) Stay steady. Even if you’ve paid bills late in the past, try and always pay them on time now. Missed or late payments appear on your credit score for six years so when they drop off, you want to be sure your credit report doesn’t show anything negative.