8 Tips to Get Your Credit Fixed in 2022
A new year is here and people all over the UK are looking to turn the page and move forward. As we emerge from a challenging point in our history, you might want to take a look at your finances and plan for the year ahead. If fixing your credit is one of your goals for the upcoming year, we’ve got you covered.
Fixing your credit can be a long and slow process so take care not to get overwhelmed. Here are a few things you can do to start fixing your credit in the New Year:
1. Check Your Free Credit Report
It’s hard to know which areas need attention for a credit fix project if you haven’t checked your free credit report. Check your credit file to make sure there are no mistakes and to view the factors that are affecting your score the most.
You can get a copy of your credit report for free from the three main credit rating agencies:
2. Dispute Errors on Your Credit Report
Once you’ve had time to carefully review your free credit report from the three major credit rating agencies, it’s important to know your options if you do find an error that shouldn’t be there. If you’re able to successfully get errors removed, it’s possible to see a lift on your credit score. The three major credit rating agencies have different ways to file a dispute on your credit report:
How to Dispute Experian Credit Report Information in the UK
Experian allows for credit report disputes to be made online. Navigate to the Experian resolution centre and select ‘Errors on my Experian Credit Report’. Follow the on-screen instructions from there.
How to Dispute TransUnion Credit Report Information in the UK
TransUnion allows for credit report disputes to be made online or by phone. To start the process online navigate to the TransUnion Consumer Enquiry centre and fill out the form on the bottom of the page. You can also send an email to firstname.lastname@example.org.
How to Dispute Equifax Credit Report Information in the UK
Equifax allows for credit report disputes to be made online, by post or by phone. If you wish to file a dispute with Equifax, navigate to their Contact Us page for consumers and refer to the ‘Query information on your credit report’ section.
3. Set up Direct Debits for Bill Payments
One of the top factors that credit rating agencies use for calculating your credit score is repayment history. Setting up a direct debit for bill payments can help protect your credit score against the negative effects of missing a payment. Be careful to make sure that your account balance is high enough to cover your bills to avoid dipping into your overdraft and incurring fees.
If you’re worried about a direct debit taking you into your overdraft accidentally, use a service like Pave App that predicts how your balance will change and will send you an alert if a bill will put you into your overdraft.
4. Register on the Electoral Roll
Registering to vote is one of the quickest ways to improve your credit score. It only takes about five minutes and can be done completely online. All you need is your basic information not including your National Insurance Number. Registering helps raise your credit score because it makes it easier for lenders to confirm your identity. If lenders can’t use the electoral roll, they may ask you to provide more information or other forms of identification which lengthens the process.
5. Pay Down Credit Card Balances
Your credit utilisation ratio is the amount of credit you currently use out of the total amount that is available to you. This ratio does have an effect on your credit score especially if it’s too high. It’s a best practice to keep your credit utilisation at under 30% of your total available limit between all cards. Paying down your credit card balances can give a quick lift to your credit score when done properly.
6. Get a Credit Builder Loan
A credit builder loan is not like a regular loan where you receive funds that can be spent. Once you get approved for a credit builder loan the lender puts an agreed amount of money into a lender held bank account. This is an account you cannot access until you have repaid the loan and any interest charged. You then make regularly scheduled payments at a fixed amount over a certain period of time, usually six to 24 months, to pay back the loan and interest. The amount you’ll need to pay back depends on the size of the loan and the interest rate. The end result can help fix your credit in the long term.
7. Use Your Rent Payments for a Credit Fix
Housing rental payments are a common form of regular payments that people make every month that often go unreported to credit rating agencies. Apps like CreditLadder are helping people report their rental payments to Experian and Equifax. This option allows you to take advantage of the on-time payments that you are already making to boost your credit score.
8. Keep Your Old Accounts Open
Having a long track record of banking history or credit card history can positively contribute to your credit score. By leaving your old accounts open, you are showing that you have a history of responsible spending. Closed bank accounts will eventually be dropped from your credit report entirely after 6 years.
Perform a Credit Analysis in Three Easy Steps
Pave App helps our members build credit in three easy steps:
- Download the app on Google Play or App Store and sign up as a member in less than 5 minutes.
- Use our Credit spotlight tool to analyse your credit file and see how Pave can help.
- Pay your monthly membership fee on time. We deduct each payment securely from a bank account of your choice.
- Each on time payment builds your credit history. We report your monthly payments to our partner, Experian. Experian is one of the most well known credit score agencies in the UK.